The World Bank has upwardly revised its 2025 growth estimate for China to 4.8%, up from an earlier 4.0%, even as rising trade tensions with the U.S. pose lingering risks.
According to the updated forecast, China’s growth is expected to taper to 4.2% in 2026, driven by weakening export momentum, reduced fiscal stimulus due to rising public debt, and deeper structural headwinds.
For the East Asia & Pacific region, the World Bank now projects growth at 4.4% in 2025, a moderate upward revision, while holding the 2026 projection steady. The lender cites global policy uncertainty, higher trade barriers, and political volatility in markets such as Indonesia and Thailand as contributing to lower investment and muted business confidence.
China’s domestic data points to mixed signals: weak factory output and dampened retail activity have raised concerns, putting pressure on Beijing to deploy further stimulus measures to hit its target GDP growth “around 5%.”
While short-term performance surprised on the upside, economists warn the rebound may not last. Slower export growth, fiscal constraints, and deeper structural issues mean the trajectory ahead is uncertain.
