Global investors are bracing for what could be one of the most consequential economic data releases of early 2026. On Monday, January 19, China will unveil its fourth-quarter GDP figures—and economists expect the numbers to show the world's second-largest economy losing momentum at a pace not seen in three years.

The consensus forecast points to year-over-year growth of just 4.4% in the fourth quarter, down from 4.8% in Q3 and marking the weakest expansion since 2022. If confirmed, the deceleration would underscore the mounting challenges facing Chinese policymakers and carry significant implications for global markets, commodities, and trade flows.

What Economists Expect

A Reuters poll of 73 economists conducted ahead of the release provides the framework for market expectations:

  • Q4 year-over-year growth: 4.4% expected, down from 4.8% in Q3
  • Q4 quarter-over-quarter growth: 1.0% expected, down from 1.1% in Q3
  • Full-year 2025 growth: 4.9% expected, likely meeting the government's "around 5%" target
  • 2026 outlook: 4.5% growth projected, indicating continued moderation

The full-year figure likely meeting the official target sounds like success, but the quarterly trajectory tells a different story. Growth slowed from 5.2% in Q2 to 4.8% in Q3 and an expected 4.4% in Q4—a steady deceleration that suggests underlying challenges are intensifying rather than resolving.

The Drivers of Deceleration

Several interconnected factors are weighing on China's growth momentum:

Property Sector Remains in Crisis

China's property market is in its fifth year of decline, with no bottom in sight. Most property activity indicators—including new home starts, sales, and property investment—have plunged 50% to 80% from their 2020-2021 peaks.

Real estate and related industries historically contributed roughly 25-30% of Chinese GDP. The sector's continued contraction creates a persistent drag that stimulus measures have failed to offset.

"The property market is the elephant in the room," noted one China economist. "Until we see genuine stabilization—not just policy announcements, but actual transaction data improving—the growth outlook remains clouded."

Consumption Fails to Fill the Gap

Chinese policymakers have long spoken of rebalancing the economy toward domestic consumption. The reality has fallen short of the rhetoric. A weak labor market has constrained households' ability to spend, while declining property values have undermined consumer confidence.

Youth unemployment, though now officially reported using revised methodologies, remains elevated. Wage growth has slowed across most sectors. Households facing employment uncertainty and falling wealth tend to save rather than spend—the opposite of what consumption-led growth requires.

Deflation Persists

China has been experiencing persistent deflationary pressure across multiple measures:

  • Producer prices: The PPI has been negative for more than three years
  • Consumer prices: CPI remains below 1%, with December's 0.8% reading the highest in nearly three years but still well below healthy levels
  • GDP deflator: The broadest measure has signaled deflation in multiple quarters

Deflation creates a negative feedback loop: falling prices discourage consumption (why buy today when prices will be lower tomorrow?), while compressed margins discourage business investment. Breaking this cycle requires more aggressive policy intervention than Beijing has yet deployed.

Exports: The Saving Grace

One factor has prevented growth from falling further: remarkably resilient export performance. Chinese exporters have benefited from:

Global supply chain reconfiguration: While some production has shifted to Southeast Asia, China remains central to global manufacturing networks.

Smaller-than-expected U.S. tariffs: The feared escalation of trade tensions hasn't materialized to the degree markets had anticipated.

Market diversification: Chinese exporters have successfully expanded into non-U.S. markets, reducing dependence on American consumers.

China's 2025 trade surplus exceeded $1.2 trillion—a record that testifies to the export sector's strength. But export dependence is a vulnerability: any shift in global demand or further trade restrictions could quickly undermine this support pillar.

Policy Response Under Scrutiny

Monday's GDP release arrives as investors debate whether Beijing's policy response has been adequate. The government has announced various support measures, but critics argue the scale falls short of what the economy requires.

The Central Economic Work Conference in December signaled priorities for 2026:

  • Expanding domestic demand through fiscal measures
  • Supporting the property sector's stabilization
  • Promoting technological self-reliance
  • Managing local government debt risks

Whether these priorities translate into sufficient stimulus remains to be seen. The government appears reluctant to deploy the massive fiscal bazooka that characterized previous slowdowns, preferring targeted measures over broad stimulus.

Global Market Implications

China's economic health reverberates through global markets in multiple channels:

Commodities: China is the world's largest consumer of most industrial commodities. Weaker Chinese demand pressures prices for copper, iron ore, oil, and other raw materials. The Q4 GDP data could trigger reassessments of commodity demand projections.

Emerging markets: Economies dependent on commodity exports to China—from Australia to Brazil to African nations—feel the effects of Chinese slowdowns through reduced export revenues.

Multinational earnings: Companies with significant China exposure, from Apple to Nike to General Motors, face headwinds when Chinese consumers retrench. Q4 earnings season could reveal the extent of damage.

Currency markets: The yuan's trajectory affects global capital flows and the competitive position of other exporting nations. Weaker growth typically correlates with currency pressure.

The 2026 Outlook

Looking beyond Monday's release, the consensus projects China's growth to moderate further:

  • Goldman Sachs: 4.8% GDP growth in 2026, above consensus
  • Reuters poll consensus: 4.5% growth in 2026 and 2027
  • World Bank: 4.0% growth in 2026
  • Vanguard: 4.5% growth, with tariff drags partly offset by manufacturing rebound

The spread between optimistic and pessimistic forecasts is unusually wide, reflecting genuine uncertainty about policy responses, property market trajectories, and trade dynamics.

What Investors Should Watch Monday

Beyond the headline GDP figure, several data points within Monday's release merit attention:

Industrial production: Has the manufacturing sector maintained momentum?

Retail sales: Any signs of consumer spending revival?

Fixed asset investment: Is infrastructure spending compensating for property weakness?

Property investment: How steep is the continued decline?

Unemployment: Is the labor market stabilizing or deteriorating?

Market Positioning

Global markets enter Monday's release with mixed positioning. Chinese equities have underperformed significantly over multiple years, potentially limiting downside if weak data is already priced in. Conversely, any positive surprises could trigger sharp rallies given depressed valuations.

Commodity markets appear more vulnerable to a negative surprise, as prices have held up better than underlying Chinese demand trends might justify.

The Bigger Picture

Monday's GDP release represents more than quarterly data. It's a checkpoint on China's economic transformation—the shift from investment-led growth powered by property and infrastructure to a more balanced model driven by consumption, services, and technological upgrading.

That transformation has proven more difficult than anticipated. The data will show whether China is managing a gradual transition or sliding toward more serious economic challenges. For global investors with portfolios exposed to Chinese growth, Monday's numbers could reshape assumptions that guide capital allocation decisions throughout 2026.