China is on track to meet its 2025 economic growth target of "around 5 percent," according to President Xi Jinping, despite facing what he described as an "unusual year" marked by considerable economic pressure. In a New Year's Eve address to the Chinese People's Political Consultative Conference, Xi stated that the nation had successfully achieved its main economic and social development goals.
The world's second-largest economy has faced increasing headwinds in recent years. Consumer confidence has been slow to recover following the COVID-19 pandemic. A persistent debt crisis in the property sector, industrial overcapacity, and heightened trade tensions with the United States have further clouded the economic outlook. Despite these challenges, booming exports and a move up the value chain by manufacturers have helped keep the nation's growth on track.
Xi acknowledged the difficulties, stating, "We faced challenges head-on and strived diligently, successfully achieving the main goals of economic and social development". He also emphasized that "overall social stability was maintained" and that an anti-corruption drive was "relentlessly pursued". China's economy is expected to reach 140 trillion yuan (US$20 trillion) in 2025.
However, some economists suggest that China's actual growth may be lower than official figures indicate. They point to weak property prices and job and income uncertainty as factors contributing to a sense of economic strain among ordinary citizens. While some industries, such as those focused on AI and electric vehicles, are thriving due to government support, small business owners report difficulties as customers cut back on spending. Recent economic data also indicates a slowdown, with retail sales increasing by just 1.3 percent in November compared to 2.9 percent the previous month, and fixed-asset investment dropping by 2.6 percent in the first 11 months of 2025.
Looking ahead to 2026, which marks the start of the 15th Five-Year Plan (2026-2030), Xi emphasized the need for a strong start. He stated that China would implement more proactive macroeconomic policies to support long-term growth, maintain social harmony and stability, and promote effective qualitative improvement and reasonable quantitative growth in the economy. These policies are expected to focus on boosting people's incomes and supporting consumption and investment. Experts anticipate that Beijing will announce a similar economic growth target for 2026 at a major annual political gathering in early March.
