The Peninsula

Despite slowed economic growth, trade tensions, and a declining property market, China continues to present itself as being on a strong path of stability and prosperity.

The Asia-Pacific Economic Cooperation (APEC) summit late last year was prefaced by expectations of how Chinese President Xi Jinping would come to the table in bilateral talks with President Donald Trump. Pressure has been continually placed on the Chinese government to accede to U.S. demands through tariffs and export controls, with a prior 145 percent tariff placed on Chinese goods. Observations on China’s recent economic slowdown cultivated a false confidence that China would back down from its disagreement with the Trump administration’s policies.

But the opposite rang true in a video posted by the Chinese Ministry of Foreign Affairs that stated “bullies like America are paper tigers” and vowed to never “kneel down.” China’s presentation of a strong front in the face of the trade war is further supported by its policy announcements. Through its prioritization of domestic development and leveraging of rare earth minerals—in addition to other issues such as TikTok, which has been framed as an issue of national security for the United States, and soybean exports, which have been a pressure point for farmers—China brought its own cards to the negotiating table with the United States.

Stability Through Five-Year Planning

China’s unflappability in these talks stems from consistent strategic economic and social development planning through its five-year plans, which center on what it says is sustainable, long-term advancement of technology and economic sectors. Coinciding with this year’s APEC summit was China’s Fourth Plenum session, which mapped the goals of the country’s Fifteenth Five-Year Plan: economic growth, technological advancement, labor productivity, middle-income expansion, and domestic production capacity. The Fifteenth Five-Year Plan will not be released until March 2026, but the current iteration and a proposal from the Central Committee provide an early signal for what to expect.

A central tenet of the Five-Year Plan is economic stability and development, with a focus on increasing domestic production and manufacturing. But China’s Q3 GDP showed a 4.8 percent growth rate, compared to 5 percent in Q2. While this does not raise alarm for China—as the growth rate remains within the country’s desired range of having 5 percent growth in 2025—it reflects the economic impact of reliance on external demand.

This quarter’s slowed economic growth coincided with rising uncertainty brought on by the Trump administration’s aggressive tariffs, which have increased anxieties for China’s domestic manufacturers. But in the wake of shifts in the export landscape, China has offset the disadvantages brought on by U.S. tariffs by diversifying exports to the European Union, Southeast Asia, and Africa. This aligns with closing remarks made last April at a symposium held in Shanghai, where President Xi expressed confidence in staying the course and adjusting when necessary to prioritize domestic economic development, centered on “new productive forces.”

As China revises its plan for increased self-reliance on technological development and domestic production, tensions could rise around structural dilemmas it presents to U.S. allies such as South Korea, which currently relies on facilities in China for memory chip production. In addition to the massive market China provides for South Korea, adjusting to China’s plan may present challenges as South Korea balances itself between Chinese production and its ally, the United States, amid U.S. efforts to reduce dependency on Chinese manufacturing plants.

Property Market Downturn

The 2020 property market crash across large portions of China had a substantial effect on national GDP, notably marked by the delisting of the privately owned Chinese real estate company Evergrande Group in 2021 after it defaulted on its debt obligations amid slowed home sales. This was coupled by prices rising faster than people’s pay, increased household debt, and rising inequality across China.

The property sector comprised 25 percent of China’s total GDP prior to the crash but fell to 15 percent in 2025. Unsold and uninhabited properties were reported to be in the millions, compounded by a 10 percent decrease in household wealth held in real estate by homeowners in 2021. In response, the Chinese government tightened its guidelines on credit accessibility for developers and encouraged local governments to buy unused land and provide subsidies for prospective homebuyers.

Economic data from the National Bureau of Statistics of China (NBS) details annual real estate development growth rates from 2020 to 2024, showing a decline from a 6.8 percent growth rate in 2020 to a slowdown in growth to -10.6 percent in 2024. More recent analyses point to a prolonged slump lasting until 2026. In light of these circumstances, the Fourteenth Five-Year Plan emphasized reducing uneven urban-rural development and prioritizing the improvement of living standards as an imperative component of common prosperity, signaling confidence in tackling the real estate issues currently facing China’s residents and enterprises.

China’s push to stabilize the housing market and increase domestic investment could incentivize more insular decision-making, presenting challenges to South Korea. For example, China has cracked down on U.S.-linked ships from shipbuilder Hanwha, viewing its connection to the United States as a national security threat. Hanwha saw a drop in shares following the implementation of this decision.

A Strong Foundation for the Next APEC

The outcome of the talks between Trump and Xi on the sidelines of APEC this past October and its significance for South Korea’s balancing strategy is clear: security and technological alliance with the United States and reliance on China as a trade partner pose an increasingly contentious environment. The year-long trade truce recently agreed upon by Trump and Xi brings a welcome de-escalation for South Korea. But because South Korea has since deepened its ties with the United States through increased development and investment in U.S. manufacturing, the Korean private sector may be more vulnerable to future salvos in a U.S.-China trade war.

Although China’s economic slowdown and property market downturn have sparked discussions of Chinese vulnerability, the Fifteenth Five-Year Plan proposal and the outcomes from the Trump-Xi trade talks suggest more stability. With China having a market share of over 70 percent in rare earths and critical minerals, accounting for 94 percent of production and refining of critical minerals central to production, the recent decision to expand its export controls on critical minerals served as a reliable negotiation tool to push back against the Trump administration’s sharper demands.

China has signaled that no major changes are ahead for its economic and technological development. In a press release from the Chinese Foreign Ministry, Xi is quoted as expressing a desire to de-escalate tensions between the United States and China and an apparent appreciation for the “long-term benefit of cooperation.” This attitude aligns with the language published in documents from the Fourth Plenum session. However, the expansion of export controls and the leveraging of TikTok, rare earths, and soybean exports show that the commitment to collaboration is subject to U.S. behaviors that China sees as suppressing its development and global reach. As China prepares to host next year’s APEC summit, the Fifteenth Five-Year Plan will be critical in its approach to balancing multilateral cooperation, competition, and domestic development.