China growth slows to three-year low as exports mask weak domestic demand

China’s GDP growth slowed to 4.5% in Q4 2025 — the weakest quarterly pace in three years — while full-year growth matched Beijing’s 5% target. Strong export performance produced a record trade surplus near $1.2 trillion and offset weak domestic consumption and sluggish fixed‑asset investment. Exports to the U.S. fell about 20% amid higher tariffs but were largely replaced by demand from Africa, Southeast Asia, Europe and Latin America. Persistent weak consumer spending and signs of deflation have left factories, retailers and property investment under pressure. Beijing is seeking to rebalance growth toward domestic consumption, including targeted interest-rate cuts by the central bank to support tech and agriculture and measures to boost borrowing and jobs. Analysts expect growth to slow further in 2026 (around 4.5%) unless exports remain strong or fiscal and monetary stimulus steps increase. Key takeaways for traders: export-driven growth keeps China linked to global trade flows and commodity demand; weak domestic demand and deflationary pressure raise downside risks for Chinese equities, property-related assets and sectors tied to consumer spending; policy easing (rate cuts or fiscal support) could provide intermittent bullish catalysts for risk assets and commodities.