China: Around 5% seen as likely GDP target

Consumption and innovation are poised to emerge as key engines propelling the world's second-largest economy toward structural rebalancing, as China enters the first year of its 15th Five-Year Plan (2026-30) period, they added.

Their comments came on the eve of the "two sessions" — the annual meetings of China's top legislature and top political advisory body — that serve as a critical window to observe the country's development plan for the new year.

"After taking a closer look at the economic targets of the 31 provincial-level regions on the Chinese mainland, which were unveiled recently, China is expected to set its growth target at a relatively robust 4.5 to 5 per cent for 2026," said Xiong Yuan, chief economist at Guosheng Securities.

Among the 31 provincial-level regions, only one raised its GDP target, 12 kept theirs unchanged, and 18 lowered theirs, and the weighted average of provincial targets stands at 5 per cent, down 0.3 percentage points from 2025, according to a report by the institution.

In particular, Beijing, Shanghai and Jiangsu province — three provincial-level regions whose past targets have closely mirrored the national figure — have each set their 2026 GDP growth goals at "around 5 per cent", and Guangdong, the country's most populous and economically strongest province, has adopted a target range of 4.5 to 5 per cent.

"The targets from these bellwethers around the 5 per cent level provide a strong signal for the forthcoming national goal," Xiong said.

Zhang Liqun, a researcher at the Development Research Centre of the State Council, China's Cabinet, told China Daily that policymakers are likely to set this year's GDP target at around 5 per cent, a practical goal for the first year of the 15th Five-Year Plan period.

"But China's actual growth in the future could approach the potential level of around 8 per cent, should its domestic demand be fully released," Zhang added.

Beyond the headline figure, markets are also keeping a close eye on consumption-boosting measures and innovation-enhancing initiatives for signals on how China intends to navigate its transition toward higher-quality development amid external uncertainties.

Ming Ming, chief economist at CITIC Securities, said that China's consumer goods trade-in program is expected to continue delivering significant results this year, supporting a moderate recovery in consumption after demonstrating clear effectiveness in 2025.

According to the National Development and Reform Commission, the trade-in program last year drove sales of related products to over 2.6 trillion yuan ($378.5 billion) and contributed 0.6 percentage points to the growth of total retail sales of consumer goods.

Building on this momentum, the Ministry of Finance has already disbursed the first tranche of 2026 trade-in subsidy funds to localities, totalling 62.5 billion yuan, to ensure seamless continuity from last year's program.

China could also turn to a substantial upgrade of public infrastructure and services financed by a new round of ultra-long-term special bonds, which Zhang, from the Development Research Centre of the State Council, described as a key move to reverse the recent decline in overall investment.

"The country's water, road, energy and telecommunication networks require massive upgrading to meet future demand and support high-quality growth," Zhang said. "Once activated, it will generate substantial demand across various sectors."

In addition to boosting domestic demand, analysts expect China to double down on technological innovation and industrial upgrades to further move up the value chain and enhance its global competitiveness.

Wang Qing, chief macroeconomic analyst at Orient Golden Credit Rating, said that economically advanced provincial-level regions are placing greater emphasis on expanding emerging industries and laying foundations for future-oriented sectors, such as quantum technology, biomanufacturing, brain-computer interfaces and artificial intelligence.

Regions at relatively lower development levels are focusing on applying technologies, particularly digitalisation and greening, to transform traditional industries, Wang added.

Analysts from UBS, a global financial services company, expect China's research and development spending to grow at least 7 per cent annually in the next five years, reaching 3.2 per cent of GDP by 2030, up from 2.7 per cent last year.

"Integrated industrial clusters, a dividend from science and engineering talent, and supersized application scenarios will continue to underpin China's tech self-reliance even as external technology blockades intensify," Wang said.

China Daily