China's Economy Slows Despite Hitting Target

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00:00China's economy grew 5% last year, meeting the government's target and matching the expansion

00:05in 2024. It shows the world's second-largest economy was resilient enough to weather Donald

00:11Trump's trade war by boosting exports outside the US. But a closer look at the data reveals

00:18a more troubling picture. Economic growth lost momentum in the last quarter, expanding at the

00:23slowest pace since China reopened from COVID lockdowns in late 2022. While industrial production

00:30fell well in recent months, retail sales and investment worsened, highlighting the deep imbalance

00:35between strong supply and weak domestic demand. That demand has been weighed down by falling home

00:41prices and persistent deflation, which has now lasted for three straight years, a record streak

00:47since China began transitioning to a market economy in the late 1970s. Adding to the pressure,

00:52China's population has shrank for the fourth straight year, with the number of newborns

00:57dropping to a record low of less than 8 million. China's reliance on exports has already pushed

01:03trade surplus to a record 1.2 trillion last year. Showing the imbalances, net exports contributed to

01:1033% of economic growth in 2025. That's the highest level since 1997, when the share was 42%.

01:16That uneven pattern will likely persist in 2026. But as strong uphands global commerce with terror threats

01:24and foreign policy swings, it remains to see how hard China's trade partners from the EU to Latin America

01:29can push back.