China's economic illusion cracks as new analysis exposes deepening structural crisis

Beijing [China], December 27 : A fresh analysis has raised serious doubts about China's official economic narrative, suggesting that China's actual growth is far weaker than government figures claim, exposing structural weaknesses that could accelerate its global isolation, as reported by The Epoch Times.
According to The Epoch Times, A December 22 report by international consultancy Rhodium Group estimates that China's real economic growth in 2025 likely ranged between 2.5 and 3 per cent, nearly half of the officially declared 5.2 per cent expansion.
The report attributes this discrepancy primarily to a sharp contraction in fixed asset investment, which plunged 11 per cent year-on-year between July and November, alongside shrinking credit growth and persistent deflationary pressure. Analysts note that no major economy has maintained 5 per cent growth while suffering from prolonged deflation, a condition China has now endured for ten consecutive quarters.
Tsai Ming-fang, a professor at Tamkang University, said the consistency of China's reported growth figures raises red flags, suggesting they are politically engineered rather than economically grounded.
Official Chinese data shows consumer prices rose just 0.7 per cent in November, while producer prices fell 2.2 per cent, marking the 38th straight month of decline. Tsai stated that exports can no longer compensate for weakening domestic demand, making official growth numbers increasingly implausible.
Echoing these concerns, Liu Meng-chun of Taiwan's Chung-Hua Institution for Economic Research said inflated data has misled both policymakers and investors. He argued that local officials often manipulate figures to project competence and maintain political favour, a practice that distorts policy decisions and deepens economic vulnerabilities, as cited by The Epoch Times.
Liu added that China's leadership has misread its global leverage, particularly in trade disputes with the United States. He stated that China's aggressive posture and reliance on export dominance have backfired, accelerating supply chain diversification away from China.
Financial analyst He Jiang-bing noted that record trade surpluses have created false confidence, prompting policies that have alienated global partners. He said that attempts to weaponise trade and control supply chains have instead hastened decoupling, weakening China's long-term position, as reported by The Epoch Times.