(Jan 23): China will set a lower economic growth goal for 2026 than last year, the South China Morning Post (SCMP) reported, in a sign top leaders may refrain from measures to reverse a slowdown that intensified in recent months.
The target range will be 4.5% to 5% this year, the newspaper said, citing three unidentified sources briefed on the matter. That’s down from “around 5%” in 2025 and compares with a goal of 8% as recently as in 2011.
Policymakers likely agreed on the decision in December at a major planning conference in Beijing, but won’t officially publicise the new objective until the annual session of China’s top legislature in March.
Gross domestic product expanded 5% last year, data released last week showed, with record exports compensating for cooling private consumption and an unprecedented drop in investment. That lopsided growth model will probably become harder to sustain in an era of rising protectionism across the world.
President Xi Jinping has already hinted at his greater tolerance for slower growth, warning officials against “inefficient” investment. Among the steps taken so far to support the economy, the central bank delivered only targeted rate cuts while the Finance Ministry opted for incremental measures to encourage private borrowing.
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“With only mild fiscal and monetary measures at the start of the year, alongside the cancellation of some export tax rebates and tolerance for yuan appreciation, policymakers appear not very keen on pursuing strong near-term growth,” said Xing Zhaopeng, a senior China strategist at Australia and New Zealand Banking Group Ltd.
Chinese authorities could set their growth target for the 2026-2030 period at 4.5%-5%, he said, noting such a downward shift would align with a pattern seen since 2016, where each successive period marked a lower stage of economic expansion.
For policymakers to reach their goal of making China a moderately developed economy by 2035, growth needs to average 4.17% over the next decade.
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Economists broadly forecast the world’s second-largest economy will expand 4.5% this year, with consumer inflation expected to remain weak, according to a survey conducted by Bloomberg this month.
Most predict the People’s Bank of China will cut the reserve requirement ratio — or the amount of cash banks must set aside in reserve — by 25 basis points in the first quarter, down from 50 basis points projected in the previous poll.
China’s economic momentum weakened further last quarter, as consumer spending and business investment remained sluggish. Net exports contributed a third of economic growth in 2025, the highest level since 1997, official data showed.
Despite stronger pushback abroad, that uneven growth pattern will probably persist in the near term because Beijing is unlikely to unleash massive stimulus this year as it continues to battle risks tied to local government debt.
A less ambitious growth target and less stimulus could hold back China’s purchases of foreign goods, given domestic demand is stagnating, according to Louis Kuijs, the chief Asia-Pacific economist of S&P Global Ratings.
“Reducing the growth target somewhat would acknowledge the pressure on organic growth, requiring less ‘artificial’ growth from stimulus, while allowing continued focus on technological innovation and autonomy,” Kuijs said.
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