{"id":437568,"date":"2026-04-06T06:24:35","date_gmt":"2026-04-06T13:24:35","guid":{"rendered":"https:\/\/climatescience.press\/?p=437568"},"modified":"2026-04-06T06:24:37","modified_gmt":"2026-04-06T13:24:37","slug":"is-chinas-economy-growing-or-shrinking","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=437568","title":{"rendered":"Is China’s Economy Growing Or Shrinking?"},"content":{"rendered":"
\n
\"\"<\/figure>\n<\/div>\n\n\n

China’s economy is growing, not shrinking, based on official data and most independent assessments as of early 2026. <\/p>\n\n\n\n

However, the pace of growth has slowed compared to pre-pandemic levels, with significant structural challenges and debates over the quality and sustainability of that expansion.<\/p>\n\n\n\n

China’s National Bureau of Statistics reported that real GDP grew by 5.0% in 2025, reaching approximately 140.19 trillion yuan (about $19.6 trillion USD). <\/p>\n\n\n\n

This met the government’s target and marked a continuation of positive annual growth. Quarterly trends showed some deceleration: 5.4% year-on-year in Q1, easing to 4.5% in Q4, with quarter-on-quarter growth at +1.2% in Q4.<\/p>\n\n\n\n

Industrial production (value added of industrial enterprises above designated size) rose 6.3% year-on-year.<\/p>\n\n\n\n

Retail sales of consumer goods increased 2.8% year-on-year (accelerating from late 2025).<\/p>\n\n\n\n

Services production grew around 5.2%.<\/p>\n\n\n\n

Manufacturing PMI returned to expansion territory in March 2026 (official reading 50.4, above the 50-threshold separating growth from contraction), after some weakness earlier in the year linked to seasonal factors and domestic demand softness.<\/p>\n\n\n\n

China set its official GDP growth target for 2026 at 4.5%\u20135% \u2014 the lowest in decades \u2014 reflecting caution amid headwinds. This is down slightly from recent ~5% targets.<\/p>\n\n\n\n

International forecasts generally align with moderate positive growth: IMF around 4.2\u20134.5%, OECD ~4.4%, Goldman Sachs ~4.8%, with consensus hovering near 4.5%. Q1 2026 growth is expected in the 4.5\u20135.5% range by many analysts, potentially accelerating slightly from late 2025 due to policy support and export resilience.<\/p>\n\n\n\n

Some skeptics (e.g., Rhodium Group) argue official figures overstate reality, estimating 2025 growth closer to 2.5\u20133% due to weak investment and discrepancies in areas like fixed asset investment. They see risks of even slower “actual” expansion in 2026 without stronger domestic demand reforms.<\/p>\n\n\n\n

In nominal terms or certain metrics (e.g., China’s share of global GDP in USD), relative size may have peaked or declined slightly due to exchange rates and global dynamics, but absolute real output continues to expand.<\/p>\n\n\n\n

_____________________________________________________________________________________<\/p>\n\n\n\n

Is China’s Economy Growing Or Shrinking?<\/p>\n\n\n\n

From The Manhattan Contrarian<\/a><\/p>\n\n\n\n

By Francis Menton<\/a><\/p>\n\n\n\n

Back in May 2024, I had a post titled \u201cSo How Are Things Going In China?\u201d<\/a> The post was inspired by a New York Times article of April 15<\/a> of that year that had reported that China\u2019s economy had grown \u201cmore than expected\u201d in the first three months of 2024; and by a just-issued IMF prediction<\/a> that China\u2019s economy would grow by 5% in 2024. To believe the New York Times and the IMF, in 2024 the Chinese economy was growing at an annual rate of 5% or more. For 2025, China again reported a GDP growth rate of about 5%<\/a>.<\/p>\n\n\n\n

Meanwhile, the reported rates for U.S. GDP growth were 2.8% for 2024 and 2.1% for 2025<\/a>. It looks like China is beating the pants off us. Surely, it can only be a few more years before China\u2019s economy overtakes ours as the largest in the world.<\/p>\n\n\n\n

Well, maybe things aren\u2019t quite that simple. On March 19 the Wall Street Journal had two pieces giving a very different perspective, one in the news pages by Jon Emont<\/a>, and the other on the editorial page by Joseph Sternberg<\/a>. Emont\u2019s piece has the headline \u201cBeijing\u2019s Big Problem: An Incredible Shrinking Economy.\u201d<\/p>\n\n\n\n

How could China\u2019s economy be \u201cshrinking\u201d when it consistently reports annual GDP growth of 5% or more? Emont:<\/p>\n\n\n\n

[B]y one important measure, China\u2019s global heft is shrinking. In dollar terms, China\u2019s gross domestic product, as a share of the global economy, peaked in 2021 at around 18.5%, when it grew to be around three quarters of the size of the U.S. economy. Many economists predicted China\u2019s explosive growth would eventually make its economy bigger than that of the U.S.\u00a0 Instead China\u2019s share of the pie has decreased, ending 2025 at around 16.5% of the global economy. It is now less than two-thirds the size of the U.S. economy, according to International Monetary Fund data.<\/em><\/p>\n\n\n\n

It all depends on how you measure GDP. If your measure is volume of production in local currency, China\u2019s economy might be growing strongly. But if your measure is the value of Chinese production in the international marketplace, its economy is shrinking.<\/p>\n\n\n\n

An indication of how the difference arises can be found elsewhere in Emont\u2019s piece:<\/p>\n\n\n\n

[China] is the global leader in strategically important industries such as electric vehicles, solar panels, shipbuilding and humanoid robots.<\/em><\/p>\n\n\n\n

Electric vehicles? Solar panels? Emont may call these industries \u201cstrategically important,\u201d but what they really are is industries that until recently were heavily subsidized in the West, but now many of those subsidies have been withdrawn. As subsidies were withdrawn during 2025, Western manufacturers have rapidly withdrawn from these industries, and taken write-offs of their investments. On EVs alone, in 2025 GM took write-offs in the range of $7 billion; Ford took write-offs of $19.5 billion; and in early 2026 Stellantis took an EV write-off of over $26 billion. All three also significantly cut back production of the EVs.<\/p>\n\n\n\n

But in China, that\u2019s not how it works. They continue to produce EVs by the zillions. CNBC reported in September 2025<\/a> that the biggest Chinese EV manufacturer, BYD, had cut prices by as much as 30%. With the much lower prices, its deliveries of new vehicles still declined by a small amount.<\/p>\n\n\n\n

And then there\u2019s the issue that China\u2019s production statistics may well be substantially inflated. From Sternberg\u2019s piece:<\/p>\n\n\n\n

It\u2019s widely understood that the government economic data concerning GDP growth are a lie intended to flatter the party.<\/em><\/p>\n\n\n\n

Sternberg also highlights other issues in China\u2019s government-directed economy. For example, China has long made easy and cheap credit available to favored and mostly state-owned industries.<\/p>\n\n\n\n

[T]he rapid expansion of [credit] for decades has been Beijing\u2019s primary means of achieving economic growth. Despite robust new bank lending of around $680 billion, the total rate of credit growth is slowing dramatically: to 6.1% year-on-year in January, compared with an average of 9% a year in 2017-24 and 18.1% in 2007-16. . . . [T]he efficiency of credit at generating economic growth may be declining even as the pace of credit creation slows. Some 58% of loans in December were made at interest rates at or below the official benchmark lending rate of 3%. . . . [B]anks are struggling to find borrowers (read: in the private sector) that could generate returns above 3%, which is remarkable in a developing economy with enormous potential for catch-up growth if nothing else. Instead banks are lending to inefficient state-owned enterprises and investment pools linked to local governments.<\/em><\/p>\n\n\n\n

They plow forward providing more and more subsidized credit to produce more and more stuff of less and less value.<\/p>\n\n\n\n

Is China\u2019s economy growing or shrinking? It could be either one, depending on what method of measuring you select. But my view is that, by the measures that count, shrinking is the right answer.<\/p>\n","protected":false},"excerpt":{"rendered":"

China’s economy is growing, not shrinking, based on official data and most independent assessments as of early 2026. However, the pace of growth has slowed compared to pre-pandemic levels, with significant structural challenges and debates over the quality and sustainability of that expansion. <\/p>\n","protected":false},"author":121246920,"featured_media":437570,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691818341,691822603,691834077,691826334,691833648],"class_list":["post-437568","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-china","tag-economy","tag-gdp","tag-industrial-production","tag-wall-street-journal-wsj","fallback-thumbnail"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/04\/0-Is-Chinas-Economy-Growing-Or-Shrinking.jpg?fit=784%2C1168&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1PPy","jetpack-related-posts":[{"id":441747,"url":"https:\/\/climatescience.press\/?p=441747","url_meta":{"origin":437568,"position":0},"title":"German Economy Slides Deeper into Crisis: Business Sentiment Hits New Low While Pressure on Investment, Production and Growth Mounts Equally","author":"uwe.roland.gross","date":"04\/28\/2026","format":false,"excerpt":"According to the ifo Institute, the Business Climate Index fell sharply in April 2026 to 84.4 points (from 86.3 in March), marking its lowest level since the COVID lockdowns in May 2020. Companies assessed both their current situation and future expectations significantly worse, driven largely by the energy price shock\u2026","rel":"","context":"In \"bureaucracy and regulatory\"","block_context":{"text":"bureaucracy and regulatory","link":"https:\/\/climatescience.press\/?tag=bureaucracy-and-regulatory"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/04\/0-German-Economy-Slides-Deeper-into-Crisis-Business-Sentiment-Hits-New-Low-While-Pressure-on-Investment-Production-and-Growth-Mounts-Equally.jpg?fit=784%2C1168&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/04\/0-German-Economy-Slides-Deeper-into-Crisis-Business-Sentiment-Hits-New-Low-While-Pressure-on-Investment-Production-and-Growth-Mounts-Equally.jpg?fit=784%2C1168&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/04\/0-German-Economy-Slides-Deeper-into-Crisis-Business-Sentiment-Hits-New-Low-While-Pressure-on-Investment-Production-and-Growth-Mounts-Equally.jpg?fit=784%2C1168&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/04\/0-German-Economy-Slides-Deeper-into-Crisis-Business-Sentiment-Hits-New-Low-While-Pressure-on-Investment-Production-and-Growth-Mounts-Equally.jpg?fit=784%2C1168&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":295192,"url":"https:\/\/climatescience.press\/?p=295192","url_meta":{"origin":437568,"position":1},"title":"What crisis? We put out a trillion tons of man-made CO2 yet global disaster losses are shrinking","author":"uwe.roland.gross","date":"01\/15\/2024","format":false,"excerpt":"Naturally this tells us nothing at all about what drives the climate, but shows the prophesies are bonkers, and the relentless weather porn on the news is like a pagan religion.","rel":"","context":"In \"Climate change\"","block_context":{"text":"Climate change","link":"https:\/\/climatescience.press\/?tag=climate-change"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/4apokalipsis-gorod-ruiny-nebo-1.jpg?fit=1200%2C766&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/4apokalipsis-gorod-ruiny-nebo-1.jpg?fit=1200%2C766&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/4apokalipsis-gorod-ruiny-nebo-1.jpg?fit=1200%2C766&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/4apokalipsis-gorod-ruiny-nebo-1.jpg?fit=1200%2C766&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/4apokalipsis-gorod-ruiny-nebo-1.jpg?fit=1200%2C766&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":413781,"url":"https:\/\/climatescience.press\/?p=413781","url_meta":{"origin":437568,"position":2},"title":"Reuters: \u201cThey [China] will lose\u201d if the World Retreats from Renewable Energy","author":"uwe.roland.gross","date":"11\/18\/2025","format":false,"excerpt":"\u201c\u2026 China is acting as a guarantor \u2026 They invested a lot on the green economy. If there\u2019s any kind of involution, they will lose. \u2026\u201d","rel":"","context":"In \"China\"","block_context":{"text":"China","link":"https:\/\/climatescience.press\/?tag=china"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/11\/00AQMeKQy8FJIb8f0Ar7nvXECNBMkADSs39WgI6zGQ8TuinNbamMqT60S5SStTEGe_mgfHHTd3CZqI_JIJiAfouPa_rf_QK6tziTohlUYo5nba8PFqgvq573MAZ4F_IyY-1.jpeg?fit=1200%2C802&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/11\/00AQMeKQy8FJIb8f0Ar7nvXECNBMkADSs39WgI6zGQ8TuinNbamMqT60S5SStTEGe_mgfHHTd3CZqI_JIJiAfouPa_rf_QK6tziTohlUYo5nba8PFqgvq573MAZ4F_IyY-1.jpeg?fit=1200%2C802&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/11\/00AQMeKQy8FJIb8f0Ar7nvXECNBMkADSs39WgI6zGQ8TuinNbamMqT60S5SStTEGe_mgfHHTd3CZqI_JIJiAfouPa_rf_QK6tziTohlUYo5nba8PFqgvq573MAZ4F_IyY-1.jpeg?fit=1200%2C802&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/11\/00AQMeKQy8FJIb8f0Ar7nvXECNBMkADSs39WgI6zGQ8TuinNbamMqT60S5SStTEGe_mgfHHTd3CZqI_JIJiAfouPa_rf_QK6tziTohlUYo5nba8PFqgvq573MAZ4F_IyY-1.jpeg?fit=1200%2C802&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/11\/00AQMeKQy8FJIb8f0Ar7nvXECNBMkADSs39WgI6zGQ8TuinNbamMqT60S5SStTEGe_mgfHHTd3CZqI_JIJiAfouPa_rf_QK6tziTohlUYo5nba8PFqgvq573MAZ4F_IyY-1.jpeg?fit=1200%2C802&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":287270,"url":"https:\/\/climatescience.press\/?p=287270","url_meta":{"origin":437568,"position":3},"title":"Dumped by New Zealand, Jacinda Ardern Still Pushing Climate Action","author":"uwe.roland.gross","date":"11\/09\/2023","format":false,"excerpt":"Former New Zealand Prime Minister Jacinda Ardern will work alongside leaders from Conservation International to advocate for climate action and better treatment of the environment. From Watts Up With That? Essay by Eric Worrall The destroyer of the New Zealand economy gifting her talents to the world. Ex-NZ leader Jacinda\u2026","rel":"","context":"In \"Climate change\"","block_context":{"text":"Climate change","link":"https:\/\/climatescience.press\/?tag=climate-change"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/0Jacinda-Ardern-Wicked-Witch.webp?fit=800%2C400&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/0Jacinda-Ardern-Wicked-Witch.webp?fit=800%2C400&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/0Jacinda-Ardern-Wicked-Witch.webp?fit=800%2C400&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/0Jacinda-Ardern-Wicked-Witch.webp?fit=800%2C400&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":252861,"url":"https:\/\/climatescience.press\/?p=252861","url_meta":{"origin":437568,"position":4},"title":"China doubles down on coal ahead of potential summer blackouts","author":"uwe.roland.gross","date":"04\/14\/2023","format":false,"excerpt":"That\u2019s funny! I thought China was going to build lots of new solar farms!","rel":"","context":"In \"Blackouts\"","block_context":{"text":"Blackouts","link":"https:\/\/climatescience.press\/?tag=blackouts"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01-chinaisplann.jpg?fit=1200%2C799&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01-chinaisplann.jpg?fit=1200%2C799&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01-chinaisplann.jpg?fit=1200%2C799&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01-chinaisplann.jpg?fit=1200%2C799&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/01-chinaisplann.jpg?fit=1200%2C799&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":290046,"url":"https:\/\/climatescience.press\/?p=290046","url_meta":{"origin":437568,"position":5},"title":"COP28: China and India Reject Climate Loss and Damage Demands","author":"uwe.roland.gross","date":"12\/05\/2023","format":false,"excerpt":"From Watts Up With That? Essay by Eric Worrall Everyone agrees the USA should be looted, but China and India want to be recipients of funding, not contributors. COP28: Should India and China receive or pay climate damage fund? By Navin Singh KhadkaEnvironment correspondent, BBC World Service China is the\u2026","rel":"","context":"In \"China\"","block_context":{"text":"China","link":"https:\/\/climatescience.press\/?tag=china"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0Screenshot-2023-12-05-130451.png?fit=1200%2C604&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0Screenshot-2023-12-05-130451.png?fit=1200%2C604&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0Screenshot-2023-12-05-130451.png?fit=1200%2C604&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0Screenshot-2023-12-05-130451.png?fit=1200%2C604&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0Screenshot-2023-12-05-130451.png?fit=1200%2C604&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/437568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/users\/121246920"}],"replies":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=437568"}],"version-history":[{"count":13,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/437568\/revisions"}],"predecessor-version":[{"id":437585,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/437568\/revisions\/437585"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/media\/437570"}],"wp:attachment":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=437568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=437568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=437568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}