China’s growth is gradually increasing, driven by emerging sectors but constrained by real estate issues. AMRO projects GDP growth of 4.8% in 2025. Structural changes and supportive policies are needed to sustain this momentum, particularly in addressing vulnerabilities in the property market and fostering innovation-led industries. Enhanced trade partnerships and green technology investments could also play a pivotal role in stabilizing long-term growth.
China’s Economic Outlook
As of October 16, 2025, China’s near-term economic growth shows signs of improvement as it undergoes a complex transition. Emerging sectors are expanding rapidly, yet domestic demand is weakened due to a downturn in the real estate sector and challenging external conditions. The ASEAN+3 Macroeconomic Research Office (AMRO) forecasts China’s GDP growth at 4.8% in 2025 and 4.4% in 2026, based on their Annual Consultation Visit from August to September 2025.
Risks and Challenges
China faces significant near-term risks and long-term structural challenges. Domestically, the economy must navigate real estate adjustments, regional financing pressures, and bank asset quality issues. Externally, uncertainties in US trade policies pose threats to exports and growth. Additional challenges include population aging, climate change, and geopolitical tensions affecting economic balance and sustained growth.
Policy Recommendations
Amid these challenges, China has adopted expansionary fiscal policies to boost domestic demand, highlighting consumer programs and fiscal transfers. Monetary policy remains supportive, though credit demand is sluggish. Coordination between central and local governments is crucial for real estate recovery and financial stability. Achieving sustainable growth will require fiscal reforms, fostering resilient consumption, and industrial policy adjustments to improve productivity and support green and digital transformation.
