China’s economy bounced back spectacularly in the Q4 2025, coming in at an annualized 10% growth rate. It grew by 1.2% qoq, as shown by new official statistics released by the National Bureau of Statistics (NBS). This number beat out market forecasts, which were for just a 1.0% increase. It continues to show a huge leap from the 1.1% growth noted in the third quarter (Q3) of that same year. The strong annual growth represents a second year of strong, sustained recovery despite the lingering global economic risks.
China’s latest GDP data confirms that the country’s annual economic growth rate has fallen to 4.4%. This is an improvement from 4.8% last quarter. This deceleration in year-over-year growth is consistent with this expected picture, as analysts expect economic momentum to continue to gradually fade. Still, the quarterly figures paint a hopeful picture for China’s economic activity moving forward.
Retail Sales and Industrial Production Insights
In December, China’s retail sales saw a modest increase of 0.9%, falling short of the expected 1.2% and down from the previous year’s 1.3%. Should this growing consumer retail malaise persist, it may be a sign of more cautious consumer spending as households adjust to new economic realities.
Perhaps the most surprising release was industrial production, which surged by 5.2%—an astounding gain. This growth was well above the expected 5.0% growth and above November’s 4.8% figure. Industrial production is booming by healthy measures. This growth means that the creative and production industries are picking up speed, which is driving the collective American economy onward and upward.
Yet retail sales and industrial production are diverging. This lag could be an indicator of varying consumer confidence and business activity across the economy. As industrial sectors boom, consumer spending is still lukewarm, and that will bear watching closely in the months to come.
Future Projections and Market Reactions
Analysts project that China’s GDP growth will stabilize at around 4.4% for the year, slightly lower than the previous year’s growth rate of 4.8%. The quarterly GDP is expected to grow by approximately 1.0% in Q4, reflecting a gradual cooling off in economic expansion compared to earlier periods.
The Aussie Dollar (AUD) rose a bit at first. It greeted with cheer China’s better than expected GDP and industrial production numbers reported in the most recent data. In the lead up to that release, AUD/USD trades were heavily in a bearish tone. This indicates a potential for greater market volatility and a cautionary outlook from investors.
GDP data serves as the main indicator of China’s economic health. It consists of all the final goods and services that have been made during a defined time period. As the world’s second-largest economy, fluctuations in China’s economic performance have significant implications for global markets.