NEW DELHI — China’s economy is losing momentum as weak household spending, slowing exports and an aging population create deeper challenges for long-term growth, according to a new report.
The report by Modern Diplomacy said China continued to expand by about 5 percent in 2025 and early 2026, but that pace marks a sharp slowdown from the double-digit growth the country recorded in earlier decades and the 6 percent to 8 percent range seen in the previous decade.
One of the biggest concerns is weak domestic demand. The report said households are not spending enough to drive stronger growth, limiting the economy’s ability to rely more heavily on consumption.
Exports, long a major force behind China’s economic rise, are also under pressure because of global uncertainty, geopolitical tensions and rising trade barriers. The report noted that China’s growth between 2012 and 2017 was supported by strong consumption, investment and stable trade, but began weakening after 2017 as domestic demand softened and export contributions declined.
China’s demographic shift is adding to the strain. The country’s population is aging and shrinking, reducing the size of the working-age population. With labor supply tightening, productivity gains have become more important to sustaining growth, but those gains have also slowed in recent years.
Investment has also weakened. Fixed investment turned negative in 2025, reflecting weaker business confidence and structural adjustments across the economy.
China’s export sector faces additional pressure from shifting global supply chains, with some manufacturing moving to alternative markets in Southeast Asia. Higher tariffs and trade restrictions, particularly from the U.S., have also affected China’s competitiveness.
The report said China’s growth outlook will depend heavily on whether the country can raise productivity and offset the effects of a shrinking workforce. It also warned that slow progress in boosting consumer demand remains a major risk. (Source: IANS)
