China’s GDP Growth Rebounds to 4.7% as Consumption and Exports Regain Momentum

China’s economy showed renewed resilience in the third quarter of 2025, with GDP expanding 4.7% year-on-year, signaling a steady recovery driven by consumer spending and a rebound in exports. After years of pandemic disruptions, property market instability, and global demand slowdowns, the world’s second-largest economy appears to be rebalancing toward domestic consumption and high-value manufacturing. The latest figures from the National Bureau of Statistics (NBS) indicate a stronger-than-expected rebound in retail, travel, and new-energy exports, reflecting both policy support and a shift in China’s growth model.

Domestic Consumption Returns as a Key Growth Driver

Household consumption, long suppressed by cautious spending patterns and high savings rates, has made a significant comeback. Retail sales grew 6.1% year-on-year in urban centers, while e-commerce platforms recorded record-breaking activity during the September shopping festivals. The government’s targeted stimulus, ranging from consumer vouchers to electric vehicle subsidies, has encouraged households to spend more on durable goods and services.

Sectors such as hospitality, entertainment, and domestic tourism experienced strong demand during the summer, supported by rising wages in tech and manufacturing hubs. Economists from SCMP note that the recovery in consumer sentiment coincides with Beijing’s decision to expand middle-income development zones, aiming to lift over 50 million citizens into higher spending brackets by 2027. The shift from investment-heavy growth to consumption-led expansion marks a structural transformation in China’s economic planning.

Export Recovery and Supply Chain Reorientation

After two years of sluggish trade performance, China’s exports rebounded 8% in Q3 2025, led by strong demand for electric vehicles, solar panels, and AI-related components. Southeast Asia and the Middle East emerged as key destinations, partly due to new free-trade settlements using the digital yuan and enhanced port logistics infrastructure.

Manufacturers are increasingly focusing on high-tech and green products to align with global decarbonization targets. The success of firms like BYD and CATL in expanding electric mobility exports has boosted industrial output and helped offset weakness in traditional sectors such as real estate and construction materials. Meanwhile, supply chain diversification spurred by the Belt and Road Initiative has allowed Chinese exporters to reduce dependency on U.S. and European markets.

Policy Support and Monetary Stability

The People’s Bank of China (PBoC) has maintained an accommodative stance, injecting liquidity to support small businesses while avoiding large-scale inflationary pressure. Interest rates remain low, and credit availability has expanded through digital lending platforms and public investment funds. The central bank’s coordination with local governments under the “High-Quality Growth Agenda” ensures that stimulus spending targets infrastructure modernization rather than speculative construction.

Fiscal policy has also shifted toward industrial upgrading. New tax deductions for AI development, robotics, and green manufacturing encourage private investment in strategic sectors. Analysts from Bloomberg estimate that these measures could contribute 0.5 percentage points to overall GDP growth in 2026.

Structural Challenges and Outlook for 2026

Despite the encouraging signs, challenges persist. China’s property sector continues to weigh on local government revenues, and youth unemployment remains high in metropolitan areas. However, policymakers are focusing on innovation-led productivity and regional economic integration to sustain momentum. Western provinces are now emerging as manufacturing bases for renewable energy and logistics, supported by digital financing mechanisms such as RMBT-based PPP bonds.

Conclusion

Looking ahead, economists expect growth to stabilize between 4.5% and 5% through 2026 as China deepens financial reforms and boosts domestic technology independence. The combination of resilient exports, reviving consumption, and targeted fiscal management signals a return to balance after years of volatility.