TLDR
- China’s 2026 GDP target is expected at 4.5–5%, lower than 2025’s 5% goal.
- Export growth led to a 2025 performance, but domestic demand stayed weak.
- Real estate and consumer spending continue to lag despite policy efforts.
- The 15th Five-Year Plan will focus on tech, services, and consumption.
China is expected to set a lower economic growth target of between 4.5% and 5% for 2026, down from the 5% target in 2025. This reflects growing concerns over weaker domestic demand, a prolonged real estate slump, and global trade headwinds.
Growth Target Reflects Slower Momentum
China is expected to set its 2026 GDP growth target between 4.5% and 5%, according to reports citing officials familiar with the matter. This would mark a slight reduction from the 5% target set for 2025.
The official figure is likely to be confirmed in March 2026 during the National People’s Congress. The decision follows a year in which China met its 2025 growth target but faced weakening domestic conditions.
In the final quarter of 2025, growth slowed to around 4.5%, its lowest pace in over two years. While full-year GDP came in at 5%, much of that growth was driven by strong export performance. Internal demand remained sluggish, showing limited improvement despite government stimulus.
Domestic Challenges Weigh on Recovery
Households spent cautiously in 2025. Big-ticket purchases like cars and homes fell short of expectations, and consumer confidence remained low. Businesses also reduced investment, especially in the property sector, which continues to struggle despite policy support.
“The property market has not responded as expected to stimulus efforts,” said one official quoted by the South China Morning Post. Developers continue to face financing issues, and homebuyers remain cautious due to falling prices and delayed projects.
Structural issues such as a shrinking workforce, demographic changes, and declining productivity are also expected to affect long-term growth potential. The new growth range reflects the government’s plan to manage these pressures while maintaining stability.
Exports Boost Growth but Pose Risks
China’s exports were a key driver of its 2025 performance. The country expanded its trade network by increasing shipments to non-traditional markets. Exporters also benefited from a slight easing of trade tensions with some global partners.
However, economists warn that relying too much on exports poses risks. If global demand falls, China’s economy may face more pressure. “China can only continue to grow its exports at that rate at lower and lower prices, which kills profits,” said Alicia Garcia Herrero, Asia-Pacific chief economist at Natixis.
Despite a record $1.2 trillion trade surplus, many analysts estimate that China’s real economic growth may have been closer to 2.5%–3% in 2025 when accounting for weaker domestic indicators.
New Economic Strategy in Five-Year Plan
Beijing is expected to release its 15th Five-Year Plan (2026–2030) in March. The plan is likely to emphasize high-quality development, focusing on domestic consumption, services, and advanced technologies.
Officials have suggested that future growth will depend more on consumer demand and innovation rather than investment-heavy or export-led models. Monetary tools such as further reserve requirement ratio (RRR) cuts are still available, according to central bank governor Pan Gongsheng.
The International Monetary Fund forecasts China’s 2026 growth at 4.5%, consistent with the new proposed range. Most economists expect this trend to continue through 2027, underlining the challenges facing the world’s second-largest economy.
