What's Up With China’s Economy? Slow Growth Doesn't Mean No Growth
- Marc Lowe
- Nov 3
- 4 min read
A long time ago, I had worked with someone who had a deep knowledge of China because he would travel there frequently for work. When we would hop into a ZOOM call, he would give glimpses into what it's like to live in China.
Some stories would amaze me with how nice it sounds to live in China. But the conversation would always come back to the China-US relations because that is what he dealt with. He would tell me things like how teaching English to students in China is no longer a priority. He would continue to bring up other topics that point to a colder relationship with China.
When it came to his investment decisions, he would let his fear about China permeate into his investment decisions.
So, whenever I see headlines about China, it makes me think of him.
If you’ve seen recent headlines, you might think China’s economy is collapsing. Stories about falling home prices, weak consumer spending, and trade tensions with the U.S. sound alarming. But, when you look closer, the reality is more balanced and not as much of a big deal as people are making it out to be.
Growth Has Slowed, Not Stopped
China’s economy grew 4.8% compared to last year’s third quarter. Even though it's not as fast as it was growing earlier this year, that’s still close to the country’s 5% target. Alot of really smart people would say that China is slowing, but that doesn't mean it is getting smaller. In my opinion, it means that the large snowball of an economy is maturing after years of rapid expansion.
Trade Is Changing, Not Collapsing
Exports to the United States fell about 17% so far this year. But total exports are still up over 6%, thanks to stronger trade with countries in Asia, the Middle East, and Africa. That shows China’s trade network is diversifying, not breaking down.
Even with new tariffs being discussed in Europe and Mexico, these policies would only affect a small share of China’s overall trade.
Services Are Leading the Way
Most people think of China as a manufacturing powerhouse, but over half of its economy now comes from services — things like technology, travel, and education. In fact, services have been growing above 5% for four straight quarters.
Consumer spending also continues to play a major role, accounting for more than half of economic growth this year. That steady spending shows China’s middle class is still driving activity, even as housing slows.
Why It Matters
China faces real challenges: a weak property market, slower population growth, and cautious consumers. But these issues are well known and already priced into markets. What often surprises investors isn’t bad news — it’s when the data turn out better than expected.
If China can keep growing near 5% without major government stimulus, that would be a positive surprise for global markets. A stable China helps support global demand, trade, and company profits — including for many U.S. businesses.
The Takeaway
The world’s second-largest economy is not collapsing. It’s adapting. And when expectations are low, even modest progress can move markets.
Bottom line: To my friend in China, I think things will be okay, and we can take a chill pill for now. China’s slowdown is a story of adjustment, not failure.
About The Author
Marc Lowe is the Founder & President of In The Money Retirement Planning. He is a Certified Financial Planner and member of NAPFA National Association of Personal Financial Advisors, XY Planning Network & Fee-Only Network. He works with retirees and those approaching retirement. He has over a decade of experience helping these folks grow their net worth, organize their finances and build better lives for themselves and their families.
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