China's economy expanded by 5% last year, meeting Beijing's official target, boosted by a record trade surplus despite headwinds from U.S. tariffs and domestic economic challenges. The world's second-largest economy achieved this growth despite a slowdown to 4.5% in the final three months of 2025.

The growth was largely attributed to a significant trade surplus, the largest ever recorded, according to a report by VCG via China. This export performance defied expectations, particularly in light of tariffs imposed by the U.S. under President Donald Trump. However, the overall economic picture remains complex, marked by struggles to stimulate domestic spending and a persistent property crisis.

Experts describe the Chinese economy as operating at "two-speed," with manufacturing and exports driving growth while consumer spending remains cautious and the real estate market continues to struggle. This divergence raises questions about the sustainability of the current growth model.

Some analysts have expressed skepticism regarding the accuracy of China's official growth figures, citing weak investment and consumer spending as indicators of a potentially slower pace of expansion. Zichun Huang, China economist at Capital Economics, believes the official numbers "overstate the pace of economic expansion" by at least 1.5 percentage points.

The past year has presented numerous challenges for China, including efforts to bolster domestic consumption and navigate the ongoing property crisis. The impact of U.S. tariff policies has also been a significant factor influencing the economic landscape. The focus will now likely shift to policies aimed at rebalancing the economy and fostering more sustainable growth driven by domestic demand.