Background on China’s Economic Situation
China, the world’s second-largest economy, has experienced a significant slowdown in its growth rate. According to the Rhodium Group, a group of experts, China’s economic growth in 2025 is estimated to be between 2.5% and 3.0%. This growth rate is roughly half of the official data’s indication, which highlights a substantial decline in fixed-asset investment within China’s $19 trillion economy during the second half of the year.
Relevance and Impact
The Chinese government is expected to announce that China has met its annual growth target of “around 5.0%” when top leaders convene in March for their annual parliamentary session and unveil the next five-year plan. This announcement will praise China’s robust export performance amidst the US trade war and weak domestic demand.
Hidden Economic Challenges
However, there is an estimated $500 billion in lost demand not accounted for, as reported by the Rhodium Group on December 22. This shortfall could undermine China’s ability to assess the urgency of avoiding a severe economic slowdown or gauge its bargaining power in negotiations with US President Donald Trump to end the ongoing trade war disrupting global supply chains.
Projected Growth in 2026
For 2026, the Rhodium Group’s estimates project China’s economic growth to range between 1.0% and 2.5%, far below the International Monetary Fund’s forecast of 4.5% for that year.
Key Questions and Answers
- Q: What is the estimated growth rate of China’s economy in 2025 according to experts?
A: China’s economic growth in 2025 is estimated to be between 2.5% and 3.0%, according to the Rhodium Group of experts.
- Q: How does this growth rate compare to official data and previous years?
A: The estimated growth rate is roughly half of the official data’s indication, highlighting a substantial decline in fixed-asset investment within China’s $19 trillion economy during the second half of the year.
- Q: What challenges does China face in assessing its economic situation?
A: There is an estimated $500 billion in lost demand not accounted for, which could undermine China’s ability to assess the urgency of avoiding a severe economic slowdown or gauge its bargaining power in negotiations with the US.
- Q: How does China’s projected growth in 2026 compare to international forecasts?
A: The Rhodium Group’s estimates project China’s economic growth to range between 1.0% and 2.5% for 2026, far below the International Monetary Fund’s forecast of 4.5% for that year.
