China’s Economy Stumbles Into 2025 as Property Slump and Tariff Threats Mount

BEIJING — The National Bureau of Statistics reported in January 2025 that China’s GDP grew 5% in 2024, meeting the official target. Dig a centimetre below the surface, and the picture is much grimmer. Consumer confidence remains flat. Housing prices have fallen for 18 straight months. Producers are cutting prices just to move inventory. And now Donald Trump is back in the White House, threatening tariffs that could shave percentage points off Chinese exports.

The housing crisis is the most visible wound. For decades, property was the engine of Chinese wealth — a place to park savings, a source of local government revenue, and a driver of demand for everything from steel to home appliances. That model is broken. Evergrande and Country Garden, the giants of the sector, have defaulted. Unfinished apartment blocks litter cities across the country. Younger Chinese, watching their parents’ generation lose savings on properties that never delivered, have largely stopped buying. The government has announced piecemeal measures — lower down payments, easier access to credit — but has refused to bail out developers directly. The result is a slow, grinding correction with no clear end.

Consumer prices tell the same story. The consumer price index hovered near zero through most of 2024, and the producer price index has been in deflationary territory since late 2022. It means factories are earning less for their goods, which means they cut wages or stop hiring. The youth unemployment rate, which Beijing stopped publishing for several months in 2023 after it hit record highs, remains alarmingly elevated for graduates. The official figure for the 16-24 age group was revised to around 14% in early 2025, but independent economists believe the real number is higher.

Exports were the one bright spot, surging as Chinese firms flooded global markets with cheap electric vehicles, solar panels, and batteries. But that success invited a backlash. The European Union imposed tariffs of up to 45% on Chinese-made EVs. Trump, during his inauguration speech, renewed promises of 60% tariffs on all Chinese goods. Even if the actual levies fall short of that threat, the uncertainty alone is enough to freeze corporate investment plans.

Beijing has not panicked. The Politburo signalled modest fiscal stimulus and a looser monetary stance, but nothing approaching the massive injection of 2008. Officials speak frequently of “high-quality development” and the need to accept slower growth as part of an economic transition. That is a hard message to sell to hundreds of millions of people who were promised rising prosperity. Small-scale protests over unpaid wages and undelivered apartments have become a regular feature in cities across the country, dealt with by local authorities through a mixture of partial payments and tight surveillance.

The question for 2025 is whether the combination of domestic weakness and external pressure will force the party’s hand. There are signs of quiet debate within economic policy circles about whether a larger rescue package is necessary. For now, the answer from the top is no.