The World Bank published its latest China Economic Update, “Advancing Reforms, Enhancing Prospects”, reporting that China’s economy maintained solid momentum in the third quarter of 2025 but is expected to slow as headwinds persist. The World Bank estimates GDP growth at 4.9% in 2025 and projects 4.4% in 2026, with future performance increasingly dependent on domestic demand. Year-to-date GDP growth reached 5.2% year on year through the third quarter of 2025, supported by accommodative fiscal and monetary policies and export demand from developing countries, while households remained cautious amid a soft labor market and declining home prices. The update flags property-sector challenges, subdued earning prospects, labor-market weakness, and trade policy uncertainty as key downside risks, while noting upside potential from higher fiscal spending, stronger social protection measures, and more decisive actions to stabilize the property sector. It also links high savings to consumption behavior, noting that almost half of household savings are invested in housing and about a quarter in bank deposits, and argues that strengthening non-bank financial institutions and improving capital-market depth and transparency could improve returns, reduce precautionary saving, and support rebalancing toward consumption.
World Bank 2025-12-11
World Bank publishes China Economic Update projecting GDP growth of 4.9% in 2025 and 4.4% in 2026
The World Bank's China Economic Update reports solid Q3 2025 momentum, with GDP growth at 4.9% for 2025 and 4.4% for 2026, driven by domestic demand. Risks include property-sector challenges, labor-market weakness, and trade policy uncertainty, while potential upsides are linked to increased fiscal spending and property sector stabilization. The report suggests enhancing non-bank financial institutions and capital-market transparency to boost returns and shift savings towards consumption.