China’s growth is expected to remain stable through the remainder of 2025 and into 2026. Subdued household income growth, negative property wealth effects, and an uncertain global trade environment will constrain domestic demand and weigh on exports and manufacturing investment. Nevertheless, infrastructure investment and continued fiscal support are expected to help cushion growth. GDP growth is projected at 5.0 percent in 2025 and 4.6 percent in 2026, with headline inflation remaining flat in 2025 and edging up to 0.4 percent in 2026.
The risks to the economic outlook are tilted to the downside. Domestic challenges include a delayed recovery in the real estate sector, rising financial strains on some local governments, persistent weakness in parts of the corporate sector, and deteriorating asset quality among some small and medium-sized banks. Externally, rising geopolitical tensions and trade conflicts could slow global economic growth and deepen geoeconomic fragmentation.