China’s Growth Reality: Skepticism Mounts Over Official GDP Figures Amid Property Rout

New economic research from Rhodium Group suggests that China’s actual GDP growth may be significantly lower than official government reports, potentially hovering between 1.5% and 2% over the last four years. This estimate stands in sharp contrast to Beijing’s stated figures, which claimed 3% growth in 2022 and approximately 4.7% for the first half of 2026. The discrepancy highlights a deepening crisis in the world's second-largest economy, primarily driven by a massive contraction in the property sector.

China’s real estate industry, which once accounted for up to 30% of the nation's economic activity, continues to struggle with a 77% decline in new housing starts from its peak. This has led to a collapse in domestic demand, forcing the country to rely almost exclusively on external demand. Last year, China recorded a record $1.2 trillion trade surplus, fueled by a surge in exports of electric vehicles, batteries, and solar panels. However, this reliance on exports is stoking international tensions as China 'exports deflationary pressures' to global markets.

The report emphasizes that while China’s manufacturing and export machine remains formidable, the underlying economy is hindered by impaired balance sheets and a credit boom that has essentially stalled. Domestic auto sales, inclusive of EVs, have recently turned negative, prompting Chinese firms to target an export volume of 10 million cars to offset the lack of local buyers. Global policymakers are increasingly looking toward protectionist measures to insulate their own industries from the influx of low-priced Chinese goods as the internal demand recovery remains elusive.