China’s economy likely grew last year at its weakest rate in three decades, outside of the pandemic, according to an AFP survey of analysts ahead of official data on Monday.The world’s second-largest economy struggled to shore up its property market while boosting domestic consumption as Chinese exports to the key US market were crimped by Donald Trump’s tariffs.President Xi Jinping said last month that growth probably met an annual target of “around five percent” in 2025.Economists estimated a median figure of 4.9 percent, in what would be the weakest growth since 1990 when China was under Western sanctions after the deadly Tiananmen Square crackdown.The announcement will be “close enough for officials to declare victory” in meeting the roughly five-percent number, a “political comfort blanket” for Beijing, said Sarah Tan of Moody’s Analytics.But the composition of Chinese growth was “deeply uneven” and official figures “mask the weak sentiment on the ground”, she said.Analysts agreed the main problem was China’s property sector, which has failed to overcome a persistent debt crisis despite rate cuts and loosened restrictions on homebuying.House prices have risen slightly in some large cities but the broader market remains sluggish.”We see no sign of a near-term property sector bottoming out,” analysts from Goldman Sachs said.Without bolder measures like converting housing stock into affordable homes, the industry will remain unstable, analysts warned.- Waning investments -Investments in property and infrastructure likely took a hit last year.Official figures already show that fixed-asset investment slowed 2.6 percent between January and November, its sharpest rate since 2020.Larry Hu and Yuxiao Zhang of Macquarie Group attributed the decline to unannounced “data revisions” by Beijing, adding they did not expect policymakers to respond.Property investment could fall by 12 percent in 2026, they predicted.Tianchen Xu of the Economist Intelligence Unit (EIU) also forecast a real-estate “correction” in 2026, adding: “This will remain a drag on growth.”Meanwhile, constraints on local government finances pushed a wider slowdown in manufacturing and infrastructure investment last year, Goldman Sachs analysts said.China’s outbound foreign direct investment continued to outpace inbound flows in recent quarters, they noted.- Too anxious to spend -Domestic spending is also cause for concern. Retail sales, a key indicator of consumption, grew at their slowest pace in nearly three years in November.Economists have long urged Beijing to move towards a growth model powered by consumption rather than exports and manufacturing.Excess supply remains an issue in manufacturing despite a government campaign last year to combat overcapacity and price cutting.China aims to become a global powerhouse in advanced manufacturing, but that promises little for domestic spending, according to Goldman Sachs analysts.”High-end manufacturing and frontier technology will not generate many jobs or lead to significantly higher incomes for average households, making only a limited contribution to private consumption,” they said.Chinese consumers remain jittery about the wider economy and high unemployment, even though officials have relaxed fiscal policy and subsidised the replacement of household items in a sputtering bid to boost spending.”That anxiety is shaping how households spend,” Tan said, noting that while domestic tourism rebounded to pre-pandemic levels last year, the average outlay per traveller was lower.- Minimal US impact -Robust exports have been a bright spot in the cloudy economic picture despite a bruising trade war with the United States that saw Trump slap steep tariffs on Chinese products.Official data showed Chinese exports to the United States plunged by 20 percent in 2025, but that had little impact on demand for Chinese products elsewhere.China’s trade surplus hit a record $1.2 trillion last year, with officials lauding a “new historical high” filled by other trade partners.”The trade war 2.0 didn’t impact China much, leading Beijing to refrain from implementing major stimulus measures,” said Hu and Zhang of Macquarie.Tan agreed that “exports are propping up the economy while consumers and property developers hang back”.But whether they continue to drive the economy in 2026 remains to be seen.Economists expect Beijing to reveal new stimulus measures — potentially at its annual parliamentary session in March — to address core challenges.”We think there will be a turnaround this year driven by policy support from fiscal and new financing policy tools,” said Erin Xin at HSBC.Xu, of the EIU, predicated that fiscal policy would be “expansionary by historical standards” for China to reach its growth target.Macquarie analysts, however, were more conservative, saying “the size of the stimulus package will largely depend on the magnitude of the export slowdown”.

The United States said Thursday that it has signed a deal with Taiwan to reduce tariffs on goods from the democratic island, while increasing Taiwanese semiconductor and tech companies’ investments in America.The agreement, the US Commerce Department said, “will drive a massive reshoring of America’s semiconductor sector.”Under the deal, Washington will lower tariffs on Taiwanese goods to 15 percent, down from a 20 percent “reciprocal” rate meant to address US trade deficits and practices it deems unfair.Taiwanese Premier Cho Jung-tai praised negotiators on Friday for “delivering a well-executed home run”.”These results underscore that the progress achieved so far has been hard-won,” Cho said.Sector-specific tariffs on Taiwanese auto parts, timber, lumber and wood products will also be capped at 15 percent, while generic pharmaceuticals and certain natural resources will face no “reciprocal” duties, the US Commerce Department added.Meanwhile, Taiwanese chip and tech businesses are set to make “new, direct investments totalling at least $250 billion” in the United States to build and expand capacity in areas like advanced semiconductors and artificial intelligence, the department said.Taiwan will also provide “credit guarantees of at least $250 billion to facilitate additional investment by Taiwanese enterprises,” the department said adding that this would support the growth of the US semiconductor supply chain.Taiwan’s government said the new tariff will not stack on top of existing duties, which had been a major concern for local industries.”Of course it’s good that the reciprocal tariff has been lowered to 15 percent — at least it puts us on par with our main competitors South Korea and Japan,” said Chris Wu, sales director for Taiwanese machine tool maker Litz Hitech Corp. But, given the company’s single-digit profit margins, “there is no way we can absorb the tariff” for US customers, he said. The department’s announcement did not mention names, but the deal has key implications for Taiwanese chipmaking titan TSMC, the world’s biggest contract maker of microchips used in everything from Apple phones to Nvidia’s cutting-edge AI hardware.In an interview with CNBC, Commerce Secretary Howard Lutnick said TSMC has bought land and could expand in Arizona as part of the deal.”They just bought hundreds of acres adjacent to their property. Now I’m going to let them go through it with their board and give them time,” he said.TSMC did not immediately respond to a request for comment.Taiwanese producers who invest in the United States will also be treated more favorably when it comes to future semiconductor duties, the Commerce Department said.Firms building new US chip capacity may import up to 2.5 times their planned capacity without paying sector-specific duties during construction. The quota lowers to 1.5 times once projects are completed.A day prior, US officials held off imposing wider chip tariffs, instead announcing a 25 percent duty on certain semiconductors meant to be shipped abroad — a key step in allowing Nvidia to sell advanced AI chips to China.Ryan Majerus, a former US trade official, told AFP that although chip tariffs are currently narrowly targeted, Washington “signaled there is certainly potential for it to grow.”Majerus, now a partner at law firm King & Spalding, added that the deal had parallels to those with other US partners. The European Union and Japan, for example, both also secured a 15-percent tariff rate.- ‘Self-sufficient’ -“The objective is to bring 40 percent of Taiwan’s entire supply chain and production, to domestically bring it into America,” Lutnick told CNBC.”We’re going to bring it all over, so we become self-sufficient in the capacity of building semiconductors,” he added.The agreement comes after months of negotiations.Taiwanese President Lai Ching-te had pledged to boost investments in the United States and increase defense spending as his government tried to lower US duties, and avoid a toll on its semiconductor chip exports.Taiwan is a powerhouse in the manufacturing of semiconductor chips, which are the lifeblood of the global economy, as well as other electronics.But US President Donald Trump previously accused Taiwan of stealing the US chip industry, and his administration had made clear it wants more of the critical technology made on American soil.Taiwan’s trade surplus in goods with the United States was around $74 billion in 2024. More than half of its exports to the United States are information and communications technology products — including semiconductors.