China: 5% Growth Without Enthusiasm

On paper, everything adds up. China’s economy grew by 5 percent in 2025, exactly matching the target set by authorities in Beijing. The goal was achieved, headlines are positive, and the statistics are finalized. From a political perspective, this is a success. In a context of global uncertainty, trade tensions, and a property market crisis, maintaining this pace was far from guaranteed.

Yet financial markets reacted coolly. There was no euphoria, no surge of capital inflows, and no shift in the narrative. Forecasts were not revised upward, and asset prices remained stable. Why?

The answer lies not in the level of growth itself, but in its quality, sources, and dynamics. These factors define the real significance of China’s data for global markets and explain why achieving 5 percent GDP growth did not excite investors.

Growth Structure

China’s economic growth in 2025 was uneven. The largest contribution to GDP came from industry and exports, while domestic demand remained weak. Retail sales grew more slowly than expected, and investments, particularly in real estate, continued to decline.

In the fourth quarter, growth noticeably slowed, reaching its lowest level in several years. This signals that the economy is losing momentum rather than building it. From an investor’s perspective, this means there is no classic cyclical impulse. There is no mechanism capable of independently driving growth in the coming quarters, neither through consumption nor private investment. The 5 percent growth achieved in 2025 does not have the same quality as 5 percent growth achieved a decade ago.

Exports as the Main Engine

Exports were a key driver of China’s growth in 2025. Record trade surpluses confirm that Chinese companies successfully found markets outside the US, offsetting weak domestic demand.

At the same time, this strategy has consequences. China increases competitive pressure on global producers by offering goods at ever-lower prices. It exports both surplus production and price pressure. For the global economy, this is not a growth stimulus. Instead of boosting demand for raw materials and investment goods, there is pressure on profit margins, growing trade tensions, and increased risk of protectionism. This environment favors defensive investment strategies rather than a global bull market.

Economic Momentum

Financial markets do not price the past—they price the future. The key issue is therefore not that China reached 5 percent growth, but whether it can maintain or accelerate this pace.

Today, signals are mixed. There is no clear catalyst to restore consumer confidence or reverse the trend in the real estate market. Stimulus policies remain selective and cautious, with authorities seemingly more focused on stability than aggressively boosting the economy.

The outlook for 2026 is viewed as less favorable than the past year. For markets, this implies limited potential for positive surprises and little reason for a significant re-rating of Chinese assets.

Implications for Financial Markets

China’s role in the global economy is changing and has a direct impact on financial markets. The country is no longer driving global growth and is increasingly acting as a stabilizer, keeping the economy at a moderate pace rather than generating a strong growth impulse.

For commodity markets, this means lower demand pressure. For economies dependent on exports to China, expectations need to be revised. For global investors, sectoral and regional selectivity becomes increasingly important. China remains on the investment map, but it is no longer an obvious source of growth. In the new global landscape, its role is more complex and less clearly positive than in previous decades.

Key Takeaways

• Achieving 5 percent GDP growth in 2025 is a fact, but the structure and dynamics of this growth explain the muted market reaction.
• Growth is defensive, driven mainly by exports and managing slowdown rather than internal stimulus.
• Economic momentum is weakening, and there are no clear catalysts for acceleration.
• The outlook for 2026 is moderate.
• Investors need to adjust their approach to China as a source of global growth.