Overview
- December data showed retail sales up 0.9% year over year as industrial output accelerated to 5.2%, pointing to soft consumption alongside firmer manufacturing.
- Fixed-asset investment contracted 3.8% in 2025 and property investment fell 17.2%, underscoring the prolonged real-estate downturn and weak domestic demand.
- China recorded a trade surplus near $1.2 trillion in 2025, supported by exporters shifting sales toward ASEAN, Africa and the European Union as U.S.-bound shipments declined.
- The People’s Bank of China cut rates on structural lending tools and expanded targeted credit programs, while leaving room for reserve-requirement and policy-rate cuts.
- Analysts expect growth to slow toward 4.5% in 2026, with population declining for a fourth straight year and deflation pressures weighing on nominal activity.