• China's GDP growth in 2024 is estimated at just 2.4%–2.8%, far below official targets and the lowest in decades outside of 2020.
  • The slowdown, driven by weak consumption and real estate woes, has reignited discussions about revisiting the U.S.-China "Phase 1" trade deal negotiated under former President Trump.
  • With U.S. economic expansion outpacing China's, the global economic balance is shifting, prompting reassessment of trade policies on both sides.

A Slowing Giant

China's economy is underperforming at a scale not seen in years, with independent analysts estimating 2024 GDP growth between 2.4% and 2.8%—well below Beijing's official 5% target. The slump, concentrated in household consumption and fixed asset investment, has raised alarms among policymakers and investors alike. While industrial output and retail sales showed modest improvement in early 2025, the broader trend remains concerning, particularly as exports—now contributing the largest share to GDP since 1997—become an increasingly critical lifeline.

The Phase 1 Question

Against this backdrop, speculation is mounting that the U.S. may revisit the "Phase 1" trade deal struck under the Trump administration. Originally intended as a partial truce in the escalating trade war, the agreement has faced persistent compliance disputes. Now, with China's economic clout diminishing relative to the U.S.—its GDP share has dropped from 77% of America's in 2021 to 64% in 2024—the calculus for both nations is shifting. "The economic slowdown increases the likelihood of renewed talks," said one analyst familiar with bilateral discussions, who asked not to be named due to the sensitivity of the matter.

Domestic and Global Ripples

Beijing's response has included targeted stimulus measures, such as consumer trade-in incentives and expanded social benefits, but structural challenges persist. The property sector remains a drag, with real estate investment down 10% year-over-year in early 2025. Meanwhile, international observers are closely tracking the fallout, as slower Chinese growth could dampen global commodity demand and trade volumes. "Without addressing weak domestic demand, China may struggle to regain momentum," warned another analyst, echoing a growing consensus that the country's economic model needs deeper reforms.

What Comes Next?

Short-term forecasts suggest GDP growth could edge up to 3–4.5% in 2025 if policy measures gain traction. But the longer-term outlook is murkier, with many experts now doubting China will surpass the U.S. economically before the 2040s—if at all. As Washington and Beijing reassess their strategies, the Phase 1 deal could become a focal point for renegotiation, though neither side has yet signaled concrete steps. For now, all eyes remain on China's ability to stabilize its faltering growth engines.