China’s Slowdown to 5% Reshuffles Mexico’s External Playing Field: Exports, Nearshoring, and Commodity Pressure
China’s economy posted 5% year-over-year growth in 2025—slow by the standards of previous decades and in line with the government’s official target. The figure came alongside signs of domestic fragility: softer consumer demand, a real estate sector still weighed down by debt, and an expansion driven in large part by exports. For Mexico, the path of the world’s second-largest economy is more than a headline number: it affects raw-material prices, the cost of industrial inputs, global trade routes, and—indirectly—the pace of investment tied to the relocation trend known as nearshoring.
According to data released by China’s statistics authority, growth eased toward year-end, with 4.5% expansion in the fourth quarter. At the same time, retail sales cooled and industrial output remained positive but less dynamic than the prior year. Analysts have emphasized that export momentum “masks” domestic weakness: when consumption doesn’t keep up, growth depends more on external demand and on policy support, such as fiscal stimulus or subsidies for purchases of durable goods.
Geopolitics also played a role. Ongoing trade tensions between the United States and China—with episodes of tougher tariffs and a partial truce toward the end of the year—reshaped export flows. While Chinese shipments to the U.S. fell sharply, the Asian country offset part of the hit in other markets, keeping global competition in manufactured goods intense. In that landscape, Mexico stands out as an economy that can gain share in North America thanks to logistical proximity and rules of origin, but it also faces the challenge of competing on costs and delivery times against Asian supply that, during periods of domestic weakness, tends to pivot outward.
For Mexico, one of the most relevant channels is global supply chains. A China with less domestic momentum can translate into downward pressure on certain industrial commodities and more competitive prices for intermediate goods (components, machinery, electronics), reducing part of the input costs for Mexican manufacturing. However, that same dynamic can increase competition in sectors where Mexico exports to the United States—auto parts, electronics, home appliances—right when the Mexican economy depends heavily on the U.S. manufacturing cycle and on foreign trade, which serves as a key anchor for activity.
Nearshoring, for its part, doesn’t hinge solely on China’s slowdown, but also on regulatory certainty and on Mexico’s availability of energy, water, infrastructure, and human capital. Even so, an international environment in which companies seek to reduce geopolitical risk and shorten supply chains can support investment decisions in Mexico, particularly in the north and the Bajío region. The takeaway for 2026 is that the potential is there, but the payoff will be uneven if bottlenecks persist: electricity transmission capacity, permitting, logistics security, and rail, port, and intermodal connectivity.
Another channel is financial. If slower Chinese growth combines with volatility in global trade, markets often adjust expectations for rates, inflation, and currencies. For Mexico, that filters through the exchange rate and flows into emerging markets. Domestically, Banco de México continues to prioritize fighting inflation and anchoring expectations, while fiscal policy faces the challenge of consolidation after a large deficit and higher financing needs. In that context, bouts of global risk aversion can lift risk premiums and borrowing costs—though Mexico can also benefit when demand for U.S.-linked assets supports the peso due to its liquidity and the depth of the local market.
Looking ahead, the central question is whether China will manage to rebalance its model toward stronger domestic consumption or continue leaning on exports and targeted stimulus. For Mexico, the practical implication is twofold: a world with less vigorous Chinese demand can ease imported inflation pressures for some inputs, but it can also intensify competition in manufacturing. Mexico’s strategy for integrating into North America—under the USMCA, with the agreement’s review cycle on the horizon—will be decisive in turning global reconfiguration into productive investment and formal jobs, beyond short-term boosts.
In sum, China’s 5% growth in 2025 confirms a structural slowdown with indirect effects for Mexico: it may lower the cost of certain inputs and reinforce the nearshoring case, but it also heightens export competition and adds uncertainty to global trade. The outcome for Mexico’s economy will depend less on China’s growth figure by itself and more on Mexico’s ability to resolve domestic bottlenecks, sustain macroeconomic stability, and capitalize on its integration with the United States.
