China's Economy Grows 4.8% in Q3 Despite Investment Concerns
Beijing, Monday, 20 October 2025.
China’s Q3 2025 GDP growth hit 4.8%, yet a 0.5% contraction in fixed-asset investment raises concerns about economic sustainability amid declining infrastructure and manufacturing investments.
China’s GDP Growth and Economic Challenges
China’s economy expanded by 4.8% in the third quarter of 2025, marking the slowest pace in a year but aligning with analysts’ expectations. This performance keeps the country largely on track to achieve its annual growth target of around 5%, as set by the government [1][2][3][4]. However, a 0.5% contraction in fixed-asset investment during the first nine months of the year has raised concerns about the sustainability of this growth. This decline is particularly pronounced in the infrastructure and manufacturing sectors, which are pivotal to the country’s economic health [1][2][5].
Investment Drop and Sectoral Impacts
The unexpected contraction in fixed-asset investment, including real estate, suggests a weakening confidence in the economy’s growth prospects, as noted by experts like Eswar Prasad from Cornell University [1][5]. Real estate investment alone fell by 13.9% year-on-year up to September 2025, exacerbating the challenges faced by the property sector, which has been in crisis since 2021 [2][3]. The decline in property investment is a critical issue as it has significant implications for local governments’ income and broader economic stability [3].
Retail and Industrial Performance
Despite these investment challenges, China’s industrial production grew by 6.5% year-on-year in September 2025, exceeding expectations and highlighting the resilience of the manufacturing sector [2][5]. Retail sales, however, increased by only 3.0% during the same period, marking the slowest pace in 10 months, which reflects subdued domestic consumption [3][5]. Analysts like Dan Wang from the Eurasia Group emphasize the need to stabilize the housing market to effectively stimulate domestic demand [1][2].
Global Trade Dynamics and Policy Measures
China’s export performance has been a bright spot, with exports rising by 8.4% in September 2025, which helped offset sluggish domestic spending [2][3]. However, escalating trade tensions with the United States, including threats of additional tariffs, pose risks to this sector’s future growth [2][3]. In response to these multifaceted challenges, China’s leadership is meeting to discuss the 15th five-year development plan, which aims to address long-term economic rebalancing and policy adjustments [5].