Dismal investment growth, struggling real estate sector, decreasing exports: Why Chinese economy is falling down

China crisis: China, the world’s second-largest economy and often considered a major engine of global growth for the past two decades, is grappling with a severe economic crisis. Despite the Chinese government’s persistent efforts to boost growth, signs of economic recovery are extremely weak. Recent reports have indicated that the ongoing trade war with the United States has further exacerbated China’s difficulties. In addition to the trade war conflict, the Chinese economy has also been impacted due to the weakening domestic economic indicators. Here are all the details you need to know about China’s weakening economy.

How has US tariffs hit Chinese economy?

As per the recent media reports, the United States, which is China’s largest export market, has imposed a 30% tariff on Chinese goods which has caused a massive hit to the Chinese exports to the US. As the data shows, China’s exports to the United States fell by 33% in August, which shows a significant setback.

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What are China’s domestic economic indicators saying?

Concurrently, China’s domestic economic indicators are also weakening. Fixed investment growth in the first eight months of the year was a mere 0.5%, the lowest level recorded since the pandemic. Investment in the real estate sector declined by 12.9%, the largest decline in the past 25 years. This sector is a vital component of China’s economy, and its weakening situation is putting pressure on the entire infrastructure.

Story highlights:

1. The Chinese economy is showing no signs of growth.
2. China’s domestic economic indicators are weakening.
3. The Fixed investment growth in the first eight months of the year in China was a mere 0.5%.

Update on China’s Industrial production

Industrial production also declined. Growth in August was only 5.2%, the lowest since August 2024. Retail sales also declined for the third consecutive month, shrinking to 3.4%. Furthermore, credit growth also declined for the first time in 2025. All these data clearly indicate that China’s economy is currently heading towards a severe recession, and this could impact global growth.