"Experts had expected punitive US tariffs would deliver a major blow to China's economic performance in 2025. Instead, the country defied expectations by recording its largest-ever trade surplus (US$1.2tn) as it found alternative markets for its products and American tariffs proved less punitive than originally threatened. The Commonwealth Bank of Australia's chief economist, Luke Yeaman, said navigating a fraught geopolitical landscape remained a major wildcard, but that China's economy should continue to grow through 2026."
"At the same time, Yeaman warned the structural challenges plaguing China's domestic economy are not going away. Among thoseis a four-year housing market meltdown that has left Chinese homeowners depressed and unwilling to spend. Home prices have plunged by more than 20% since their peaks in 2021, which in addition to the blow to consumer confidence has also left a looming debt crisis in the property sector that casts a pall over the country's economic prospects."
China's economy expanded by 5% in 2025, meeting the official growth target. The country posted a record trade surplus of US$1.2tn by shifting exports to alternative markets as US tariffs proved less severe than feared. Structural domestic problems persist, including a four-year housing market collapse with home prices down over 20% since 2021 and a looming property-sector debt crisis. Consumer prices rose just 0.8% in 2025, indicating deflationary pressure and weak household spending. Geopolitical tensions and ongoing trade aggression remain significant wildcards for near-term growth despite official assurances of stable momentum.
Read at www.theguardian.com
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