In 2025, China delivered around 5% GDP growth, broadly in line with the official target. Behind this headline, the familiar "property + infrastructure" growth model is giving way to a structure driven more by consumption, exports of high-tech and green equipment, and targeted investment in energy and industrial upgrading. For energy and chemical markets, this is already reshaping where volume is created, where it is eroded, and which product chains face the next round of margin pressure.
1 | Three drivers of GDP: the old trilogy, new roles
Consumption: policy- and digital-led, not property-led
Final consumption accounted for 52% of GDP growth in 2025. Social retail sales exceeded RMB 50 trillion, with full-year growth around the mid-3% range.
Two forces held up the consumption "base":
- Trade-in programmes for durables such as home appliances and passenger cars, which lifted related sales into the multi-trillion-yuan range.
- E-commerce and services, where online physical goods and services spending both outpaced headline retail growth.
At the same time, property's spillover effect into consumption kept eroding. Building materials retail spending contracted, dragging demand for PVC, glass-related chemicals and other "real-estate chain" products.
Exports: from low-end volume to high-tech and green equipment
Net exports contributed 32.7% of GDP growth. Total exports rose just above 6% in value terms, but high-tech exports expanded at more than double that pace, signalling an ongoing upgrade in China's export mix.
Investment: headline drag, structural rotation
Gross capital formation contributed just over 15% of GDP growth in 2025, around 10 percentage points lower than in 2024. Since September, fixed-asset investment growth turned negative on a cumulative basis for the first time since the 2020 pandemic shock.
For energy and chemicals, this means the capex impulse is moving away from traditional construction materials toward grid-related copper, aluminium, insulation, specialty rubbers and advanced plastics.
2 | Consumption detail: from "oil and property" to parcels, plastics and services
The structure of consumption is changing faster than the aggregate.
Packaging and logistics as a new volume anchor
Express parcel volumes approached 2,000 hundred million pieces (around 200 billion), up by nearly mid-teens year on year. Combined with over 5% growth in online physical goods, this created a solid floor for packaging plastics demand:
- Apparent demand for PE and PP recorded double-digit growth, noticeably above GDP.
- These gains occurred despite lacklustre demand in some traditional downstream sectors, highlighting the resilience of e-commerce-linked consumption.
Durables: policy pulse, structural limits
Trade-ins for appliances and cars boosted ABS and PC demand. ABS apparent consumption grew by high-teens, and PC showed positive growth as well.
Property chain: "L-shaped" demand
Chemicals closely tied to property construction, such as PVC and soda ash, registered negative apparent demand growth. Building-related consumption and investment indicators in the PPT charts both remain under pressure, consistent with an extended bottoming process rather than a quick rebound.
3 | Transport energy: oil demand under pressure, electricity and jet fuel stand out
- NEV retail sales rose by high-teens, and NEV penetration in passenger car sales climbed from low-40% at the start of 2025 to almost 60% by December.
- Overall travel demand recovered; passenger-kilometre data for rail, aviation and waterways show solid growth, while road passenger turnover barely increased.
The key point is that mobility is not shrinking; its energy base is shifting:
- Gasoline consumption fell by nearly 5%, and diesel demand dropped by more than 8%; crude throughput barely increased.
- Highway NEV traffic during the 2025 National Day holidays already reached about one-fifth of flows, with charging volumes up by more than 40%.
In this context, traditional gasoline and diesel face structural compression, while aviation kerosene stands out as one of the few fossil fuels with visible demand growth, supported by civil aviation recovery.
For refiners and fuel-related chemicals, the report frames 2025 as an inflection in which transport electrification, not macro weakness alone, explains the downshift in oil product demand.
4 | Supply, overcapacity and "green inside the old"
On the supply side, industrial value-added grew close to 6% in 2025, but capacity utilization rates and profitability tell a more complex story. Nationwide industrial capacity utilization stood in the mid-70% range, down slightly from 2024, with chemicals below the manufacturing average.
- Policy-anchored high-utilisation sectors
- Basic chemicals: upstream high load, midstream under pressure
- "Green upgrading" within legacy sectors
Headline overcapacity remains, yet within that, "green" product lines already carry the real growth. From an investment and strategy perspective, the report argues that the focus should shift from "entire plants" to specific green product lines and high-barrier materials inside each complex.
5 | Power system: demand scale and structure both reset
One of the more striking charts in the deck shows total electricity consumption surpassing 10 trillion kWh in 2025 for the first time, with 5% growth on an already massive base. This implies that China alone now consumes more electricity than several major economies combined.
For materials, the implication is a multi-year demand lane in grid equipment, high-voltage components, insulation materials, energy-storage chemicals and advanced polymers for cables and power electronics.
A more comprehensive discussion, including charts, case studies and data appendices, is availablein the January issue of China (Energy Transition) Policy Perspective (produced by GL Consulting).
This GDP section is part of a broader report that also covers:
- Quarterly GDP and "three-driver" decomposition charts
- Detailed material-level demand maps for packaging plastics, engineering plastics, property-chain chemicals and green materials
- Scenario analysis for 2026 under different policy and trade-barrier assumptions,
- Sector scorecards linking macro trends to specific energy and chemical sub-sectors.
- Strategic guidance on how to position along logistics, electrification, high-end equipment and verifiable green materials, in contrast to chasing aggregate tonnage growth
A more comprehensive discussion, including charts, case studies and data appendices, is available in the January issue of China (Energy Transition) Policy Perspective (produced by GL Consulting).
Click the hyperlinks for the full text or email glconsulting@mysteel.com.
