Archive · 13 Nov 2025
China's Economy Faces Slowdown Amid Weak Consumer Spending
Imagine China's economy is like a big car.
Lately, people aren't buying as many new things (like toys or clothes), which is like the car's engine sputtering.
This has been happening for a while, even though the people in charge have been trying to encourage everyone to spend more.
It's partly because people are worried about their jobs and not earning much, and also because the car's 'house market' (where people buy homes) isn't doing well.
Even things like factories making goods and building new things are slowing down.
However, one part of the car, like its 'export pipes,' is still working well, sending goods to other countries.
The government has tried putting in some extra fuel (money), but it might take time to work.
They hope the car will still reach its yearly speed goal, but it relies a lot on sending things out instead of people buying things inside.
China's consumer spending growth is slowing, marking the longest period of deceleration since its post-pandemic rebound faded.
Retail sales in October are forecast to grow by only 2.8%, the slowest pace in over a year.
Weakness in consumption is linked to stagnant household incomes, cautious spending, and the persistent downturn in the property sector.
Industrial output and fixed-asset investment are also cooling, with property investment seeing a significant contraction.
Despite domestic challenges, China's exports remain resilient and are expected to benefit from global demand, helping the economy meet its annual growth targets.
- Who
- China's economy, policymakers, economists, households, businesses
- What
- Experiencing a slowdown in consumer spending and overall economic momentum, despite government efforts to boost domestic demand, while exports remain a relative bright spot.
- When
- October 2024, with trends analyzed against past performance and projections for late 2025 and 2026.
- Where
- China
- Why
- Weakening consumption is attributed to stagnant incomes, cautious spending sentiment, property sector weakness, and a high comparison base, while industrial output and investment are also cooling.
Reasons for Slowdown
Government and Export Outlook
Consumption Growth
Reasons for Slowdown
Retail sales are slowing due to a high comparison base from last year and fewer working days, alongside structural issues like stagnant incomes, cautious spending, and a weak property sector, leading to the longest period of weakening consumption growth since 2021.
Government and Export Outlook
While domestic consumption is weak, exports have remained resilient and could see recovery in 2026, boosted by global demand for Chinese goods, including AI hardware.
Stimulus Effectiveness
Reasons for Slowdown
Targeted consumption subsidies and fiscal measures (over 1 trillion yuan) have yet to show significant results in boosting overall consumer confidence or addressing weak household income growth.
Government and Export Outlook
Government fiscal measures are expected to take months to impact the economy, and the central bank appears hesitant to implement broad monetary easing.
Economic Trajectory
Reasons for Slowdown
Industrial output and fixed-asset investment are also cooling, with property investment in a deep downturn, indicating a broader drag on domestic demand.
Government and Export Outlook
Despite domestic weakness, China is projected to meet its full-year GDP target of around 5%, driven by manufacturing strength and exports, although reliance on external demand may continue.
- Projected October Retail Sales Growth
- 2.8%
- Longest Period of Weakening Consumption Growth
- Since 2021
- Projected October Industrial Output Growth
- 5.5%
- Estimated Fixed-Asset Investment (Jan-Oct)
- -0.8%
- Fiscal Measures Announced Since September
- > 1 trillion yuan ($141 billion)
- Full-Year GDP Target
- Around 5%
- Projected GDP Growth (2025)
- 4.9%