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China Growth Seen Cooling to Three-Year Low in Q4 as 2025 Hits Target

Policymakers favor targeted easing, reflecting weak domestic demand versus export strength.

Overview

  • A Reuters poll points to 4.4% year-on-year growth in Q4, about 1.0% quarter-on-quarter, with full-year 2025 near 4.9% and official data due Monday.
  • Consumption looks soft with retail sales forecast to rise 1.2% year-on-year in December, the weakest since December 2022.
  • Fixed-asset investment is expected to register its first annual contraction in decades, underscoring the property downturn.
  • External demand remains the key support as China logged a record trade surplus near $1.2 trillion in 2025 driven by diversification to non-U.S. markets.
  • The PBoC cut sector-specific rates and kept the door open to reserve-ratio or broader rate reductions, while analysts flag weak nominal growth and a 2026 GDP forecast near 4.5%.