HONG KONG – China’s economy saw a 5% growth rate in 2025, driven by robust export activity, even amidst the imposition of tariffs by U.S. President Donald Trump.

Despite this annual growth, the economy experienced a slowdown in the last quarter, expanding at just 4.5%, as reported by the government on Monday. This marked the slowest quarterly growth since late 2022, when the COVID-19 pandemic had a significant impact. In the prior quarter, the growth had been slightly higher at 4.8% annually.

Chinese policymakers have been striving to accelerate economic growth following a downturn in the property market and the lingering effects of the pandemic, which have affected overall economic performance.

The year’s growth aligned with the government’s target of achieving an expansion of “about 5%.”

While consumer spending and business investments remained weak, strong export figures helped balance the scales, resulting in a record trade surplus of $1.2 trillion.

“The main concern is how long exports can continue to be the primary growth driver,” noted Lynn Song, the chief economist for Greater China at the Dutch bank ING, in a recent analysis.

Chinese exports to the U.S. suffered after President Donald Trump returned to office early last year and began raising tariffs. But that decline was offset by shipments to the rest of the world. Soaring imports of Chinese goods are leading some other governments to take action to protect local industries, in some cases raising import duties.

“Should more economies also start ramping up tariffs on China, as Mexico has done and the E.U. has threatened to do, eventually, a tighter squeeze will be seen,” said Song.

China’s leaders have repeatedly highlighted boosting domestic demand as a policy focus, but their effects have so far been limited. A trade-in program for drivers to replace older cars with more energy-efficient models, for example, has been losing steam in recent months.

“Stabilization, not necessarily recovery, of the domestic property market is key to revive public confidence and, hence household consumption and private investment growth,” said Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management.

China has also provided trade-in subsidies for home appliances such as refrigerators, washing machines and TVs. While major consumer stimulus policies in 2025 — including such subsidies — are set to continue in 2026, they may be scaled back, Weiheng Chen, global investment strategist at J.P. Morgan Private Bank, said in a recent note.

Investments in artificial intelligence and other advanced technologies remain a key priority for China’s ruling Communist Party as it moves to boost self-reliance and rival the U.S. Many ordinary Chinese and small businesses are struggling with tough times and troubling uncertainty over jobs and incomes.

Some economists and analysts believe China’s actual economic growth in 2025 was slower than official data suggest. The Rhodium Group, a think tank, said last month it expected China’s economy to grow only by 2.5% to 3% last year.

The Chinese economy expanded at a 5% annual rate in 2024, and 5.2% in 2023, according to government data. Ambitious official growth targets have also trended down over the past few years, from 6% to 6.5% in 2019 to “around 5%” in 2025.

A slower annual expansion is expected for 2026. Deutsche Bank forecasts that China’s economy will grow about 4.5% in 2026.

While China could probably maintain social stability even at lower economic growth rates, Beijing “wants the economy to keep growing”, said Neil Thomas, a fellow at the Asia Society Policy Institute’s Center for China Analysis.

China likely needs to sustain a roughly 4-5% annual expansion in order to reach its soft target by 2035 of $20,000 gross domestic product (GDP) per capita, he added.