China's Economic Growth Hits Three-Year Low Amid Structural Challenges

China's economic growth decelerated to a three-year low of 4.5% in Q4 2025, as domestic demand weakened. While trade and exports remain strong, structural imbalances—particularly in the property sector—pose significant risks, suggesting the need for possible policy stimulus to sustain economic momentum.

China's economic growth dipped to its lowest in three years during the fourth quarter of 2025, according to the National Bureau of Statistics. The growth rate fell to 4.5% year-on-year as domestic demand weakened, and analysts fear potential risks of continuing structural imbalances.

Despite the slowdown, external factors such as strong exports have helped sustain the economy, buoyed by an undervalued Chinese currency. Analysts, however, believe that targeted policy stimuli may be required to counter the sluggish property market and bolster domestic demand.

The economic outlook remains uncertain with challenges like rising global trade protectionism looming ahead. As China enters 2026, policymakers might need to adapt more aggressively to manage a 'managed slowdown' and address structural vulnerabilities to ensure stability.

(With inputs from agencies.)