HONG KONG (AP) — From some perspectives, China’s economy appears resilient. strong exports Breakthroughs in artificial intelligence and other advanced technologies.
But that’s not how it feels for many ordinary Chinese people who have endured the burden of being vulnerable. real estate prices and uncertainty about their jobs and incomes.
Some industries are thriving thanks to government support for technologies such as: A.I. Small business owners report that they are having a tough time as customers. reduce Regarding expenses.
Some economists believe the world’s second-largest economy is growing slower than official statistics, even though China could reach its official 2025 annual growth rate. Target is around 5%. Beijing averted a harmful full-scale attack trade war Relations with the United States are good after President Donald Trump signed a truce with Chinese President Xi Jinping, but many long-term challenges remain.
Chinese consumers are feeling the pinch
Xiao Feng, a billiard hall owner in Beijing, said business is “very tough” now because people have less disposable income.
“The wealthy don’t seem to have time, and the common people don’t seem to have money to spend,” Xiao said. “Once you subtract all expenses, including rent, labor and utilities, you just break even.”
Mr. Xiao and his wife, a nurse, have a 10-year-old son. With a stable income, she is now the breadwinner of the family.
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“Before, I used to contribute about 100,000 yuan (about $14,250) a year to the household budget,” Xiao said. Mr. Shao reduced the number of employees from eight to five due to intensifying competition. “But I haven’t had any income for about six months straight.”
Zhang Xiaoze, a Beijing-based commercial real estate agent, said she was earning up to 3 million yuan (about $428,000) a year at her peak in the mid-2010s. Currently, he earns about 100,000 yuan a year, but the business environment is “very tough,” he says.
“Many companies are moving out of Beijing, so demand is slow,” said Zhang, who is married with one child. “The fundamental problem is that people don’t have money.”
“Sometimes you have to dip into your savings to support your family,” he says.
Two sides of China’s economy
China’s ruling Communist Party is pushing for Xi’s leadership’s push for “quality growth” and domestic innovation as it shifts investments and policies toward higher levels of growth. consumption-driven growth model and high tech industry.
In the process of rapidly emerging as an export manufacturing powerhouse, China invested heavily in infrastructure such as railways, highways and ports, as well as in industrial zones and other real estate development. meanwhile Expansion of consumer spending and business investment are key priorities, but exports remain a key driver of employment and economic growth.
In the first 11 months of this year, China’s exports reached a record $3.4 trillion, with imports totaling $2.3 trillion, while increased shipments to Southeast Asia and Europe offset a sharp decline to the United States.
“China’s economy is moving away from the growth engines that have driven growth for the past 30 years, and is in what I call a ‘great transition period,'” said Lin Song, chief economist for Greater China at ING.
As in the US, the AI boom in China is contributing to the rise in stock prices. However, the resources poured into the technology sector have not translated into direct wealth effects for most people, Song said. “It is no wonder that many feel that the situation on the ground does not reflect relatively optimistic growth prospects,” he said.
The discrepancy between official economic growth rates and what many Chinese people feel suggests China Jichun Fan, China economist at Capital Economics, said China’s actual growth rate “could be significantly lower” than official data suggests.
Recent economic indicators show that growth is slowing. Retail sales in November increased only 1.3% from the same month last year, slower than the 2.9% increase in October. Meanwhile, fixed asset investment decreased by 2.6% in the first 11 months of 2025.
Economists at HSBC said in a recent report that household disposable income growth has slowed in recent years to below its pre-pandemic pace, and that “income from real estate has virtually disappeared.”
of international monetary fund It recently raised its forecast for China’s growth from 4.8% to 5%, close to the official target, and banks including Goldman Sachs have also raised their forecasts for China’s economic growth in recent months.
Other estimates vary. Capital Economics expects growth to be between 3% and 3.5% annually this year. The Rhodium Group think tank puts it at 2.5% to 3%.
Real estate recession is a source of concern
Much of the confidence of Chinese consumers and investors rests in real estate, which is the primary store of household wealth. Home prices have fallen more than 20% from their 2021 peak. major recession Following a crackdown on excessive borrowing in the real estate industry, which caused a debt crisis.
According to China’s National Bureau of Statistics, new home sales in the first 11 months of this year decreased by 11.2% compared to the same period last year. Real estate investment decreased by nearly 16% compared to the previous year.
Xiao, a billiard hall owner in Beijing, bought an apartment in Beijing’s Tongzhou district in 2019 for more than 3 million yuan. ($428,000). It is currently worth approximately ($342,000).
“I have a 10-year-old car, but given the economic situation, I have no plans to replace it,” Xiao said. “If the value of my apartment hadn’t fallen so much, I might have already bought a new one.”
Xiao said she had spent a “significant amount” on tutoring for her son. “But now we have cut it out completely and are teaching him ourselves instead,” he added. “There is considerable uncertainty about the economic outlook.”
A Tianjin-based tutor, who gave his last name only as Zhou because his company does not allow him to speak to the media, said his income had fallen by more than a third as more parents stopped sending their children to tutoring.
“Because of the economic situation, parents don’t want to spend money on private tutors,” Zhou said. “They prefer large group classes to one-on-one tutoring.”
“Business is much worse than before, about 50% worse than it was during COVID-19,” he added. “The future looks bleak.”
Growth is likely to slow in 2026
Most forecasts are for economic growth to slow after 2026 as China’s leaders seek gradual measures, deferring sweeping reforms that could boost consumer confidence. The challenges ahead will center around consumption and investment, but economists say growth may slow as the housing market remains weak.
Oversupply is a chronic problem in many industries, including autos, steel and consumer goods, pushing down prices and profits. Overall, China’s export prices have fallen by more than 20% since the beginning of 2022, according to HSBC. Government efforts to curb price competition have so far had “minimal impact”, the report said.
the country is growing trade surplusThe trade friction, which is expected to exceed $1 trillion by 2025, may increase trade friction and trigger protectionist moves that put pressure on exports.
Economists such as Michael Pettis of the Carnegie Endowment for International Peace argue that a fundamental shift is needed to give workers more ownership of a country’s wealth. But for now, it seems politically untenable.
The owner of a budget hotel in the northern city of Shijiazhuang was pessimistic about the outlook as people cut back on everything, including business travel.
“I don’t think the economy will recover soon,” said the man, who gave his name only by his surname Zai, worried that making critical comments about the economy could get him into trouble. “[I’m]not highly educated, so it’s almost impossible to change industries. Other industries are also struggling.”
“My lease expires in May or June next year,” he added. “If the situation does not improve by then, we will close the hotel.”
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The Associated Press Beijing Newsroom contributed to this article.
