China's Primary Industry Share of GDP Rebounds to 5.8%, Food Security Policies Show Effectiveness

China's 2025 Secondary Industry GDP Share Plunges to 32.8%; Deep Real Estate Slump and PPI Deflation Trigger Structural Upheaval

Core Overview: Nominal Share Collapse and Emerging Transformation Pains According to the latest DataTrack data, the share of China's secondary industry (industry and construction) in GDP slipped to 32.8% in 2025, a significant correction of 5.8 percentage points from 38.6% in 2024. Although the officially announced real GDP growth rate for 2025 reached 5.0%, the dramatic decline in the secondary industry's share reveals the brutal reality of "volume increase with price decrease." Full-year PPI (Producer Price Index) fell by 2.6%, causing nominal value-added growth in the industrial sector to lag far behind real output, resulting in its share of the overall economic pie being significantly squeezed by the service sector (tertiary industry), where prices remained relatively stable. Key Details: Real Estate Headwinds and Industrial Deflation Breakdown data confirms the sources of this double blow. First is the deep freeze in the real estate market; according to National Bureau of Statistics (NBS) data, real estate development investment fell by 17.2% year-on-year in 2025, and sales of newly constructed commercial buildings dropped by 12.6%, directly impacting upstream steel, cement, and construction output values. Second is the fierce price competition in manufacturing; although output in high-tech manufacturing and equipment manufacturing maintained growth, prices for raw materials and processing industries generally fell. The PPI for the mining industry and raw material industry plunged by 4.7% and 2.6% respectively, further weakening the nominal contribution of the secondary industry. Deep Attribution: Old Growth Drivers Stalled, Price Bottom Not Yet Reached Institutional analysis points out that this decline in share is a resonance of structural adjustment and cyclical deflation. Goldman Sachs analysis warns that the adjustment in the real estate market is not yet over, and the actual bottom for housing prices may not emerge until 2027, implying that the construction sector's drag on the economy will continue. Rhodium Group also noted that new housing starts have fallen by nearly 68% from their peak, indicating that the traditional growth model relying on infrastructure and real estate is no longer sustainable, while policy efforts to deliberately guide resources toward "new quality productive forces" have accelerated the marginalization of old economic sectors in the GDP share. Outlook and Risks: Slow Bottoming Out in 2026, Overshadowed by Foreign Trade Gloom Short-term (1-2 months): As policy focus shifts to stabilizing domestic demand at the beginning of 2026, it is expected that officials will maintain loose monetary policy and expand fiscal spending to support infrastructure, attempting to mitigate the PPI decline. The secondary industry share is expected to seek support in the 32-33% range. Medium-term (3-6 months): Risks primarily stem from the external trade environment. With global trade protectionism heating up, China's manufacturing exports may face more tariff barriers. If domestic consumption cannot effectively take over the baton, the industrial sector may face a continued dilemma of "increasing production without increasing revenue." Investors should focus on whether high-end manufacturing can offset price war pressures through technology premiums, as well as the actual effectiveness of property market destocking policies. Web Search References https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHa78MuuMn2a81ELuX2YqitWjDj-PQigX8hM_1WOaM9vw8FbjoQBM_sDJ1eHoDf_trKN58HsE4kXU5Y3nMHo-2Pxtu6jmpHWX_ACLB9zZ0NzGKR6Ru78VnXn8NVLfG-3pX-bL-CerBv5H7C_T8htAsxVfHwYJngxdWfMrH8aUf9mWOk50X- https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQH37-e1tuwG_2_d1YU4bhM2U26gtfkLyKl1xRnaSSNJGMPiYwyva_UH54uBcSFM7BRpZcB56Kwh28KsNsvA_ebDnnT9ppBlYblXOdfqRvqfpM31C6dQJdL_QKmDaaMU_woA2V81wDJFPWgjLw4XZX-Uvv9PAkj-TC50jqt784lYyiEYNwIrzWxyXg0IQUUPcIOGsGRXmgQ9_3C3UInHCrwCYHRQZXA= https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGv5F01tQV2ak1LUlwiSnIO2f3JGLgcJgUHcgT4GgliD2nx2cwj0IyfdILYjAKNS8zT3dO-9hMT8ArmQbXtdvsxxCmq4OofgSEYWDRtB-2Qq0eMafhsbYqY1iN0cYiWkPOo0-mKk7DwQCLOylsqVQEJYUUc9UNf1Oqx