China’s economy will grow only 2.5% to 3% in 2025, according to estimates from think tank Rhodium Group, about half the pace suggested by official data, due to the collapse of fixed asset investment in the $19 trillion economy in the second half of the year.
Political leaders are expected to announce that China has met the annual growth target of “around 5 percent” when top leaders meet in March for the annual parliamentary session and unveil the next five-year plan, highlighting the robustness of exports in the face of a tariff war with the United States and domestic demand.
But there will be around $500 billion in unaccounted for lost demand, according to the report released by the Rhodium Group. The Chinese Bureau of Statistics did not immediately respond to a request for comment.
If he is right, the deficit could hamper Beijing’s ability to gauge the urgency with which it must act to avoid a serious slowdown in the world’s second-largest economy, or to gauge its bargaining power with U.S. President Donald Trump to end the tariff war that has upended global supply chains.
In 2026, China’s economy is on track to grow between just 1% and 2.5%, the Rhodium Group estimates, well below the IMF’s forecast for the year of 4.5%.
“History offers no examples of economies experiencing 5% real GDP growth while facing years of persistent deflation, as China has done for 10 consecutive quarters. We doubt China’s will be the first,” the report adds.
Fixed asset investment in everything from roads and railways to housing and factories has been strong in 2025, up 4.2% year-on-year in the first quarter, but fell into negative territory in June and fell as much as 12.2% in October.
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