China’s economy grew by 5% in 2025, meeting its official target, data released on Monday showed. This steady growth matched 2024’s pace. Experts expected US tariffs to severely harm China’s economy, but instead, China recorded its largest-ever trade surplus of $1.2 trillion. It found new markets and the tariffs were less harsh than expected. Luke Yeaman, chief economist at Commonwealth Bank of Australia, called the geopolitical situation a “major wildcard.” He said China’s economy should continue growing in 2026 but warned, “the structural challenges plaguing China’s domestic economy are not going away.” One big issue is the housing market meltdown that started four years ago. Home prices have fallen over 20% since 2021. This has made homeowners unhappy and less willing to spend money. It also created a debt crisis in the property sector, casting a shadow on China's future economy. Unlike much of the world fighting inflation, China battled deflation. Consumer prices rose just 0.8% in 2025. Yeaman warned this could slow growth for years, just like Japan’s economy after its 1990s property crash. Kang Yi, head of China’s National Bureau of Statistics, said China “faces problems and challenges” but will keep a “stable, sound growth momentum.” However, growth slowed in late 2025, with only a 4.5% increase in output compared to the previous year—the weakest since late 2022. Citi analysts described a “K-shaped” economy where exports and manufacturing grew but retail sales dropped in December. Experts often question official numbers. Capital Economics says China’s growth might be overstated by 1.5 percentage points. China wants to boost household consumption, which is under 40% of the economy—low compared to the global average of about 60%. The government gave 300 billion yuan (about $43 billion) in subsidies last year to encourage buying new appliances. The program will continue in 2026. Yet Moody’s Analytics noted a “sense of déjà vu” as officials promise support again, while households and businesses wonder if actions will match the words.