China’s official growth figures have been labeled as fake by a recent report, which warns of significant risks looming over the country’s economy. The report, citing estimates from US think tank Rhodium Group, suggests that China’s actual economic growth is much lower, around 2.5–3.0 per cent, compared to the government’s claimed 5 per cent for 2025. Some experts even believe that China is experiencing close to zero growth currently.
The report points out two critical challenges that could impact China’s economic prospects: a substantial amount of bad debt resulting from a burst bubble and a demographic shift towards an aging population with low birth rates. It highlights concerning signs of deflation that have persisted for three years, with real growth figures surpassing nominal growth. Additionally, there has been a 1.7 per cent decrease in total government revenues in 2025, the first decline since the COVID‑19 crisis in 2020.
The looming threat of a credit bubble scenario is underscored by a significant volume of non‑performing loans, which surpass Japan’s post‑bubble burden. The report draws attention to visible economic strains, such as deserted shopping streets, vacant malls, and homeless individuals struggling to meet basic needs. Moreover, it raises alarms about the youth unemployment rate in China, with some economists estimating it to be over 40 per cent, while the country’s population has been declining since its peak in 2021.
Blame for China’s economic challenges is placed on President Xi Jinping’s policies, which are criticized for favoring state-owned enterprises over innovators. The report suggests that this approach, coupled with economic mismanagement, has contributed to the current economic predicament facing China.
