BEIJING, Jan 23 (Reuters) – China is likely to set a 2026 official economic growth target of between 4.5% and 5%, the South China Morning Post reported on Friday, reflecting how even a $1.2 trillion trade surplus cannot shield the world’s No.2 economy from slowing global growth.
The $19 trillion Chinese economy grew 5.0% in 2025, meeting the government’s target and defying a second Trump White House intent on slowing it down, by stepping up shipments elsewhere to offset weak domestic consumption, a strategy that economists warn will be increasingly hard to sustain.
The International Monetary Fund expects global growth to hold at 3.3% this year, matching 2025, before slipping by one percentage point in 2027, meaning that Chinese exporters will likely need to accept lower and lower prices if they are to sustain record-breaking shipments.
As such, policymakers are under pressure to rewire the manufacturing juggernaut for a durable post-pandemic recovery built around balance over breakneck expansion: a more resilient model built around mobilising its 1.4 billion-strong population to ward off a possible Japan-style stagnation.
The risk is that China begins to feel like an economy that is in recession, even if its headline growth figure continues to far exceed those of other, more developed economies.
Some economists estimate China’s economy grew by just 2.5% to 3% last year, leaving a shortfall of around half a trillion dollars, which the Rhodium Group think tank attributes to a sharp drop in fixed-asset investment as domestic demand weakened in the second half.
“Such a target would indicate a tolerance for a moderate deceleration… as Beijing highlights the importance of ‘high-quality’ development,” said the three sources cited by the Hong Kong-based paper.
China’s State Council Information Office, which handles media enquiries on behalf of the government, did not respond to Reuters’ request for comment.
Beijing will launch its next five-year plan in March at the annual parliamentary session, where the growth target is expected to be unveiled. Some analysts speculate policymakers may stick with 5%, a threshold widely viewed as the marker of solid performance, to be seen as making a strong start.
Seventy-three economists polled by Reuters last week said growth is likely to slow to 4.5% in 2026 and maintain the same pace in 2027. The IMF also expects 4.5% growth this year, which it revised up from 4.2% in December.
China’s central bank governor Pan Gongsheng told state news agency Xinhua on Tuesday there is still room to deploy monetary policy tools, such as cutting the amount of cash banks must hold in reserve to inject more liquidity into the economy, even after multiple cuts since the COVID-19 pandemic ended.
“At some point in time, there is not going to be enough global growth,” said Alicia Garcia Herrero, chief economist for the Asia-Pacific at Natixis, following China’s GDP data release this week.
“China can only continue to grow its exports at that rate at lower and lower prices, which kills profits, and kills the economy,” she added.
(Reporting by Joe Cash in Beijing; Additional reporting by Fabiola Arámburo in Mexico City; Editing by Clarence Fernandez and Jacqueline Wong)
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