Challenges Persist as China’s Exports and Services Flourish While Domestic Consumption Lags

Amidst a landscape of contrasting economic activity, China’s dual-speed economy presents challenges with a booming export sector alongside sluggish domestic consumption. The global appetite for electronics and semiconductors continues to fuel a robust export-focused manufacturing sector, while internal factors hamper domestic growth. Carol Liao of Boston Consulting Group notes the ongoing trend of resilient manufacturing and exports coupled with weak consumption and fixed asset investment, a pattern that has been consistent since 2025. The COVID-19 pandemic upheaved Chinese consumer behavior, tipping the scales from consumption growth surpassing GDP growth to the reverse. The declining property market, marked by falling home…