China said its economy grew by 5% in 2025, meeting the government’s official target despite a slowdown to 4.5% in the final quarter of the year, driven in part by a record trade surplus.

The world’s second-largest economy faced a year of weak domestic spending, a prolonged property market downturn, and ongoing uncertainty from US tariff policies. Analysts describe the figures as reflecting a “two-speed economy,” with manufacturing and exports supporting growth while consumer spending remains cautious and the housing sector continues to weigh on overall activity.

Some economists question the official numbers. Zichun Huang, a China economist at Capital Economics, said the figures “overstate the pace of economic expansion” by at least 1.5 percentage points, citing weak investment and subdued household consumption.

Data released on Monday also highlighted China’s deepening demographic challenges. The number of births fell to 7.9 million in 2025, the lowest since records began in 1949. The country’s population declined for the fourth consecutive year, dropping 3.4 million to 1.4 billion. Experts warn that falling birth rates could reduce demand for housing and consumer goods, adding pressure to an already struggling property market.

The property sector remains a key concern. House prices continued to fall in December, dropping 2.7% year-on-year, marking the sharpest decline in five months. Property investment fell 17.2% for the year. The prolonged slump affects construction activity, household wealth, and local government finances, leaving millions of homeowners with unfinished or devalued properties.

Retail sales rose only 0.9% in December, the slowest pace in three years, while factory output increased 5.2%, slightly up from November’s 4.8%. Analysts say export growth and manufacturing output are currently propping up the economy, while domestic consumption remains weak.

China recorded a record trade surplus of $1.19 trillion in 2025, driven by strong exports outside the United States. Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis, warned that “China is effectively pushing growth through exports at a loss,” a strategy that may not be sustainable as it can undermine profits and long-term expansion.

Speaking on Monday, Kang Yi, head of China’s National Bureau of Statistics, acknowledged the economy “faces problems and challenges, including strong supply and weak demand,” but said China can “maintain stable, sound growth momentum this year.”

Analysts say China faces a delicate balancing act. Policymakers aim to support growth through targeted stimulus and boost consumer confidence while avoiding excessive debt and reducing reliance on exports amid ongoing global trade tensions, including uncertainty over US tariff policies.

While China officially met its growth target, the underlying economic picture suggests caution. Weak domestic demand, a fragile property market, and demographic shifts indicate that sustaining long-term growth will require careful management of both fiscal and monetary policy.

Stablecoins recorded a historic year in 2025, as both governments and private companies encouraged their adoption across financial systems worldwide. Total transaction volumes surged 72 percent over the year, reaching $33 trillion (€28 trillion), according to Artemis Analytics.

Unlike traditional cryptocurrencies, stablecoins are designed to maintain a stable value by pegging themselves to real-world assets, most commonly the US dollar. They are fully backed by reserves such as treasury bills or cash, allowing holders to redeem them on a 1:1 basis. More than 90 percent of stablecoins in circulation are dollar-pegged, with Tether’s USDT holding a market cap of $186 billion (€160 billion) and Circle’s USDC at $75 billion (€65 billion). In 2025, Circle processed $18.3 trillion (€15.7 trillion) in transactions, while USDT handled $13.3 trillion (€11.4 trillion).

A report by venture capital firm a16z highlighted that stablecoins facilitated at least $9 trillion (€7.7 trillion) in “real” user payments last year, an 87 percent increase from 2024. Analysts noted that this volume is more than five times that of PayPal and over half of Visa’s annual transaction throughput.

Central banks have also taken notice of the growing adoption of digital currencies. In addition to private stablecoins, several governments are developing central bank digital currencies (CBDCs). China’s digital yuan has been in pilot phases since 2019, while the European Central Bank is preparing to issue a digital euro, targeting 2029 for the first launch. McKinsey data shows that cash still accounts for 46 percent of global payments, but non-digital transactions are declining, particularly in developed countries with strong digital infrastructure.

The United States has taken a different approach. In January 2025, President Donald Trump signed an executive order blocking any government action to issue CBDCs, clearing the way for private stablecoins to dominate. Trump later approved the GENIUS Act, which established a comprehensive regulatory framework requiring stablecoin issuers to maintain full 1:1 reserve backing with liquid assets. The framework aims to ensure stability and encourage confidence in the use of digital dollars.

In Europe, stablecoin adoption continues under the EU’s Markets in Crypto-Assets (MiCA) regulation. By July 2026, firms must secure a Crypto-Asset Service Provider (CASP) licence to operate legally. Payments company Ingenico recently partnered with WalletConnect to allow merchants to accept stablecoins, including USDC and EURC, using existing terminals. WalletConnect’s CEO, Jess Houlgrave, said that while MiCA is not perfect, “some regulatory clarity is better than none,” and called for uniform enforcement to prevent regulatory shopping.

Crossmint, a stablecoin infrastructure provider, also secured a MiCA licence in Spain this week. General counsel Miguel Zapatero noted that obtaining the licence is costly but increases credibility, with other regulators often fast-tracking approvals for licensed firms.

As private stablecoins gain traction and CBDCs slowly roll out, 2025 marked a turning point in the integration of digital currencies into mainstream financial systems, showing strong institutional and corporate adoption while highlighting the global push for regulatory clarity.