Chinese economic growth continued to slow in the third quarter of 2025, at the weakest pace in a year, against a backdrop of weak household consumption and trade tensions between Beijing and Washington. The Asian giant is struggling to recover from the Covid-19 pandemic and is facing a persistent real estate crisis, which is weighing on the finances of local authorities and household confidence.
This situation is aggravated by the tariff war launched at the beginning of the year by US President Donald Trump. In this context, Chinese GDP growth during the July-September period stood at +4.8% year-on-year, as reported on Monday by the National Bureau of Statistics (NBS). This is a clear slowdown compared to the previous quarter (+5.2%), but expected by the economists surveyed. “Growth is still maintained,” writes Julian Evans-Pritchard, analyst at Capital Economics, in a note, who, however, highlights persistent weaknesses in consumption and investment.
“Frightening”
Mixed consumer morale is reflected in figures released on Monday by the SNB: A key indicator of consumption, retail sales growth slowed in September to its weakest pace since November 2024 (+3% year-on-year). This decline is explained, in particular, by the attenuation of the effects of the consumption stimulation programs launched by the authorities last year, according to Julian Evans-Pritchard.
Household spending appetite is also being curbed by the continued decline in real estate prices, which in September recorded their biggest drop in a year, the economist estimates. “To encourage consumption, subsidies alone are not enough,” says employee Alin. “It’s more of a global problem as a whole,” he adds, referring to job security, real estate prices and even education-related expenses.
Another negative indicator: investments in fixed capital decreased in the third quarter, especially in the real estate sector (-13.9% in one year), according to the SNB. This drop is “rare and alarming,” says Zhiwei Zhang, chief economist at Pinpoint Asset Management. A positive sign is that industrial production increased 6.5% year-on-year in September, according to the SNB, more than the forecasts of analysts surveyed by Bloomberg (+5%). But this growth can only be explained “because exports, still solid, have compensated for the weakness of domestic demand,” says Julian Evans-Pritchard.
The statistics were released on the first day of a major meeting of members of the Central Committee of the ruling Communist Party of China (CPC). During this four-day “plenary session”, the country’s strongmen will deliberate on the direction, particularly economic, for the coming years. The next five-year plan (2026-2030) should “focus on the goal of achieving socialist modernization, with a view to building a great country and promoting national regeneration,” Chinese leader Xi Jinping declared in April, according to official media.
Xi-Trump meeting?
Talks are also expected later this month between senior Chinese and US officials to try to resolve trade tensions. A meeting between Donald Trump and Xi Jinping could also take place on the sidelines of the next Asia-Pacific Economic Cooperation (Apec) summit, which will open at the end of the month in South Korea.
In the face of trade tensions, many experts have been calling for years for Beijing to transition to a growth model driven more by domestic consumption than exports. The Chinese party-state has set a growth target of “around 5%” by 2025. This ambition remains realistic, according to economists, who stress, however, that these official figures could be overestimated compared to real growth.
Source: BFM TV
