Our economic outlook for China
September 10, 2025
Growth momentum likely to moderate despite stock rally
“The economy could remain unbalanced in September. We expect industrial production and exports to remain robust while domestic demand may be lackluster. A campaign to stop companies from engaging in price wars can’t by itself reflate the economy without demand recovery.”
Grant Feng,
Vanguard Senior Economist
Growth momentum is likely to moderate in September despite a 13% stock market rally in the third quarter through September 10. We expect export resilience to continue in the near term, albeit moderately, as tariff uncertainty fades out.
With the economy steadily on track for the year and a lower comparative base for the third quarter, we see limited urgency for the government to take stimulative measures soon. We expect growth to slow in the second half, owing to the payback of consumption frontloading, a still-ailing property sector, and elevated global uncertainty.
Given these developments, we foresee prevailing deflationary pressures continuing for the rest of 2025. The path toward broader reflation is expected to be gradual and bumpy.
China economic forecasts
Notes: GDP growth is defined as the annual change in real (inflation-adjusted) GDP in the forecast year compared with the previous year. Unemployment rate is as of December 2025. Core inflation is the year-over-year change in the Consumer Price Index, excluding volatile food and energy prices, as of December 2025. Monetary policy is the People’s Bank of China’s seven-day reverse repo rate at year-end.
Source: Vanguard.
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