China's Economy Falters Amid Rising Tariffs and Tepid Demand

Trade Tensions Weighing China’s Growth at 4.8%

China’s economic growth slowed to a mere 4.8% during July to September 2025, its most sluggish annual pace in a year. Trade frictions with the United States, compounded by subdued domestic demand, have been pivotal in this downturn. According to ABC News - Breaking News, Latest News and Videos, the period saw a deceleration from a 5.2% growth rate in the previous quarter, a sign of mounting economic headwinds.

Political Landscape Influencing Economic Strategies

Amid these challenges, Chinese President Xi Jinping and key Communist Party figures are partaking in crucial political proceedings to delineate economic and social policies guiding the next five years. A looming question remains whether Trump and Xi will proceed with a proposed meeting crucial for potential easing of tensions.

Auto Industry and Property Sector Woes

A sector-specific analysis highlights fierce price wars in the auto industry, linked to overcapacity, and a lingering downturn in the property sector undermining consumption. The latter sees nationwide new home sales estimated to drop by 8% in 2025, with further declines slated for the subsequent year.

Economic Projections and Market Sentiments

The World Bank forecasts a continuation of the 4.8% growth rate for the current year, slightly below China’s 5% official target. Though robust growth in the early half of the year offers some leeway, disappointment looms large over China’s Golden Week holiday spending, echoing battered consumer confidence.

Anticipated Policy Responses and Economic Outlook

Economists and analysts suggest more government measures are needed to reignite consumption and support the property market. A potential interest rate cut by China’s central bank, anticipated by year’s end, could stimulate spending and investment. Lynn Song, ING Bank’s chief economist for Greater China, acknowledges the need for strategic government interventions to revitalize economic momentum.

As China navigates its current economic landscape marked by external and internal pressure points, the coming months will be crucial in determining whether it can reverse current trends and steer towards stable growth.