China's problems: Weaker growth and record low birth rate

China's economy is experiencing a significant slowdown in economic growth.

According to data from the Beijing Bureau of Statistics, gross domestic product (GDP) grew by 4.5% in the last quarter of 2025, compared with the same period last year.

This marked the weakest quarterly growth for the world's second-largest economy since the end of strict restrictions imposed due to the pandemic about three years ago.

In the previous three quarters, growth was higher: 5.4%, 5.2% and 4.8%, respectively.

For the whole of 2025, a growth of 5% was recorded. Thus, the target predicted by the Chinese government of “around 5%” was achieved. But at the same time, this is one of the lowest annual growth rates in decades.

Economists see the reason mainly in weak domestic demand: a tight labor market and falling real estate prices are having a depressing effect on consumers. Investment has also slowed.

Fixed asset investments fell by 3.8% in 2025 compared to the previous year. The decline in the real estate sector is particularly clear: investments in real estate fell by 17.2%.

The economy continues to be buoyed by foreign trade. Despite ongoing tensions with the US and new uncertainties over trade policy, Beijing last week announced a record trade surplus of $1.2 trillion for 2025.

The trade dispute with Washington led to a significant decline in exports to the United States by 20 percent, as well as a decline in imports from the United States by 14.6 percent. However, other markets were able to compensate for these losses.

Experts: Growth slowdown will continue

International organizations expect a further slowdown in China's economic growth in the coming years. The World Bank predicts growth of about 4.4% for 2026, while the International Monetary Fund – about 4.5%. The American investment bank Goldman Sachs is a little more optimistic with a forecast of 4.8%, but also emphasizes that stable exports are likely to remain the main pillar, reports D.W.

At the same time, Goldman Sachs warns of ongoing structural problems.

In China, building an economy driven by consumption and services will take “years, if not decades,” the bank’s chief economist for China, Hui Shan, wrote in a recent analysis.

In addition, the real estate sector has not yet bottomed out and the weak labor market continues to dampen household purchases.

Demographic crisis – record drop in births

Adding to this is the demographic crisis. According to official figures, China's population fell by 3.39 million in 2025, to 1.405 billion today. This marks the fourth consecutive year of decline, and the decline has accelerated. While the number of deaths has risen to 11.31 million, the number of births has fallen to a record low of 7.92 million.

Today, only 5.63 children are born per 1,000 people. This is the lowest number since the founding of the People's Republic of China in 1949. Some of the reasons for this are the high cost of raising children, expensive housing, but also economic insecurity among young people. The number of weddings also continues to decline.

In 2016, the Chinese government abolished the so-called one-child policy, which was introduced in the early 1980s to control rapid population growth. From 2021, couples are allowed to have three children. However, the UN expects China's population to shrink from 1.4 billion to 800 million by 2100.

To ensure a sufficient workforce, the government plans to gradually increase the retirement age.

The development complicates Beijing's plans to boost domestic consumption. The looming loss of hundreds of millions of workers is putting additional pressure on already depleted pension funds.

The Geo Post