China's economy maintained a 5% growth rate in 2025, matching official targets while masking significant sectoral transformations beneath the surface. Newly released data reveals an economy undergoing rapid reconfiguration, with traditional pillars contracting as advanced manufacturing and green technology sectors surge.
Contraction in Traditional Sectors
Real estate development investment plummeted 17.2% last year, dragging overall fixed asset investment down 3.8%. New commercial housing sales fell 12.6%, reflecting continued market adjustments in this once-dominant sector.
Emerging Industries Drive Growth
Offsetting these declines, information services investment soared 28.4%, while aerospace equipment manufacturing grew 16.9%. Digital product manufacturing expanded 9.3%, led by industrial robotics production. New energy vehicles now constitute over 50% of domestic car sales, signaling lasting consumer preference shifts.
Innovation Fuels Transition
R&D expenditure reached 2.8% of GDP in 2025, surpassing OECD averages for the first time. This strategic investment supports China's pivot toward high-tech industries and sustainable technologies, positioning 2026 as a critical year for consolidating these structural changes.
