China's Economic Growth Slows Further as Investment and Consumption Weaken

Key Indicators Show Significant Decline

China's economic growth continued its downward trend in October 2025, with several key indicators showing significant deterioration. The National Bureau of Statistics reported that fixed asset investment contracted by 1.7% during January-October 2025, marking the first contraction since the 2020 pandemic period. This decline was worse than the 0.5% decrease in the same period previously and below Reuters analysts' expectations of 0.8%.

Sectoral Breakdown Reveals Weakness

The investment decline was led by a 14.7% drop in property investment, which continued its downward trajectory from the previous month's 13.9% contraction. In contrast, manufacturing investment showed some resilience with a 2.7% increase. Utility spending, including electricity and fuel, saw a significant surge of 12.5%.

Expert Analysis Points to Structural Factors

Goldman Sachs analysts attribute the investment decline to China's efforts to tighten industrial capacity and the ongoing challenges in the housing sector. The property sector continues to be a significant drag on overall investment, while manufacturing shows limited growth. The weak consumer demand and reduced investment activity together paint a challenging picture for China's economic recovery.

Implications for Economic Recovery

The current economic indicators suggest that China's economic recovery is facing significant headwinds. The combination of weak consumption, declining property investment, and manufacturing disruptions during national holidays has contributed to the overall economic slowdown. As policymakers consider their response, the focus is likely to be on stimulating demand and supporting key sectors.