China’s latest growth numbers offer reassurance at first glance, but they obscure a more uncomfortable reality: the world’s second-largest economy is increasingly reliant on external demand at precisely the moment when the global environment is turning hostile. The headline expansion masks a deeper imbalance between what China produces and what it is able, or willing, to consume at home. For over a decade, Beijing has spoken of rebalancing towards domestic consumption.

Under President Xi Jinping, that ambition has only grown more urgent, framed as a shift toward high-quality growth driven by innovation and internal demand. Yet the structure of the current recovery suggests that this transition remains incomplete. Manufacturing and exports continue to do the heavy lifting, while household consumption lags behind, constrained by uncertainty, falling property values, and a weak social safety net. This would be a manageable tension in a stable global environment. It is not. The widening conflict in West Asia, centred around disruptions to energy flows through the Strait of Hormuz, is already pushing up input costs and testing........

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