China's Transportation and Warehousing Output Surpasses 6.2 Tril

China's Construction GDP Sees Rare Decline, Falling to 8.64 Tril

Core Overview: Construction Output Turns from Boom to Bust, Down Nearly 4% YoY China's construction industry reached a historic turning point in 2025. The latest data shows that the construction industry GDP for 2025 was 86,425 billion RMB. Compared to the peak of 89,949.28 billion RMB in 2024, this represents a significant contraction of approximately 3,524 billion RMB, or a decline of 3.9%. This is not only a rare instance of negative annual growth in recent years, but it also pulls output levels back near 2023 levels, confirming that the weight of physical construction activity within the macroeconomy is substantially declining. Key Details: Deep Plunge in Real Estate Investment and Lackluster Infrastructure Deconstructing the data reveals that structural adjustments in the real estate market are the primary cause. According to market information (CGTN report), real estate development investment fell by 17.2% year-on-year in 2025, and sales of new commercial properties also dropped by 12.6%, directly slashing upstream demand for the construction industry. Furthermore, Infrastructure Investment, traditionally an economic buffer, unexpectedly recorded negative growth of 2.2%. This reflects that local governments, under the pressure of "debt resolution," are no longer able to sustain the high-intensity capital expenditure of the past. In-depth Attribution: Active Deleveraging and Structural Rebalancing Institutional analysis suggests that this decline is not merely a cyclical fluctuation but a structural reshaping driven by policy. Chambers and Partners points out that the government is addressing the implicit debt problems of Local Government Financing Vehicles (LGFV) through a large-scale Debt Swap program, which limits financing capacity for new infrastructure projects. Meanwhile, capital is being guided toward high-tech manufacturing (up 9.4% year-on-year), implying that resources are being withdrawn from the inefficient construction sector in exchange for long-term economic health. Outlook and Risks: Short-term Pain Inevitable, Medium-term Seeking a Bottom Short-term (1-2 months): With the arrival of the Lunar New Year off-season in early 2026, coupled with the fact that capital chains of real estate enterprises have not yet fully recovered, construction activity is expected to remain sluggish in the first quarter, with data potentially probing lower depths. Medium-term (3-6 months): The World Bank predicts that China's GDP growth will slow to 4.0% in 2026. The construction industry needs to observe whether fiscal policy will release new quotas for "affordable housing" or "urban renewal" after the "Two Sessions" in March. Lacking new momentum, the sector risks repeatedly testing a bottom at the 8.5 trillion RMB level; investors should be wary of the risk of continued weak demand for related raw materials (such as steel and cement). Internet Search References https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGNYyiaF1BYRXvV_wdazsLWtyucvhXpzLfjBIc9KNmKUCBB9RiiyJwWI4p2E1Mqss-SmpmleBADrXziQLRFMiGTGSl0X5pCyTEJQWdOn38DlB0JcfJZiHwX1YXBr4Fc6xUByneyYxY4GRaeShnm2sX-7HXcLb1hlshUjx8yEIqPw7l7PDBEqRbs2JdlInITWDUrCYJPLwofEieL1DhDwiOTqSwcbfKC5O1a https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQE1bT_57bXKEik9Oh4KtJR0ZxVsH_9XXwJoFpkriGo7HysI6r3GC2rqidSCdRf_IUMuSol2qmkZRJJEPtmTvO8LTMOHRy3ALqUvZh30bPaRA6YT0_zbowTe4PVUlx0oJozG0enf4KWJrN58qMdssCSYKChwppymL9YFnEEH_ln-j4-BvtA_zpxKadG1 https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGYkBYOONyHXJvuuf-LK7qngcgInQ50jmilbdStGQNpNSMyXZ2ZE4gyNyaOICNJEqYq6C1QvmY5rYV0zKJ4hGRGAqjro4OJkK4uMnkf8cMtJH-mcdH9q03zlRGittWkgzA6uLDNMiSAja_Y8lLrFaohmu7Z_ThFWTtw8G30-DOD9Sqax9cCyNZIvuBjmCR4dDDi7BYojxdKBW3VpFXr3A==