China’s property sector has suffered a four-year pricing decline, with home prices falling more than 20% since 2021, even as the broader economy expanded by 5% last year. Beijing’s National Bureau of Statistics reported that full-year growth reached 5%, matching the pace recorded in the previous year.
The statistics bureau said economic output rose 4.5% in the final quarter, marking the weakest quarterly growth rate since early 2023. Quarterly expansion eased from 4.8% in the third quarter, according to the agency’s data.
The report also showed a record trade surplus of $1.2tn, which helped support overall economic growth. Analysts said exports and manufacturing offset domestic weakness as China increasingly found alternative markets.
Luke Yeaman, chief economist at the Commonwealth Bank of Australia, described geopolitical factors as a major wildcard for the outlook. Yeaman added that he expects China to continue growing through 2026 despite persistent structural headwinds.
Capital Economics estimated that official growth figures may be inflated by as much as 1.5 percentage points. After adjusting for inflation, the research firm said growth could be closer to about 3.5%.
Property Market, Consumption And Risks
The housing market remains a central structural problem for the economy, according to the head of the statistics bureau. Kang Yi of the National Bureau of Statistics said China continues to face significant problems and challenges.
Citi analysts described the economy as K-shaped, reflecting contrasting fortunes across different sectors. They noted that retail sales disappointed in December even as exports and manufacturing activity continued to climb.
Household spending still accounts for less than 40% of annual economic output, the report said, contrasting with a global average close to 60% and highlighting the size of the consumption gap.
The government provided 300bn yuan, or about $43bn, in subsidies for appliance trade-in programmes. Officials said the scheme would be extended into the coming year in an effort to boost consumption.
Moody’s Analytics said the start of the new year brings a sense of déjà vu, as households and businesses once again question whether policy support will match official rhetoric.
Analysts warned that property busts can suppress economic growth for years, even in the absence of a banking collapse. The report also noted that US tariff tensions remain a factor, with further measures signalled.
Those tariffs, along with broader geopolitical strains, were cited as continuing wildcards for China’s economic outlook.
