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2h ago

China's Growth Outlook Cools to 4.5% for 2026 as Stimulus Stays Measured

Weak consumption alongside a prolonged property slump is weighing on policy choices.

FILE PHOTO: A cargo ship with containers docks at a terminal of the Yantian port in Shenzhen, Guangdong province, China October 30, 2025. REUTERS/Tingshu Wang/File Photo/File Photo
Chinese retail sales, a key indicator of consumption, grew at their slowest pace in nearly three years in November
China's trade surplus hit a record last year, despite a plunge in exports to the United States after Trump slapped steep tariffs on Chinese products
China aims to become a global powerhouse in advanced manufacturing

Overview

  • A Reuters poll of 73 economists projects GDP growth of 4.5% in both 2026 and 2027, with consumer inflation seen at about 0.7% this year.
  • Economists estimate 2025 growth at roughly 4.9%, near the "around 5%" target, but the fourth quarter likely marked the slowest pace in three years as consumption and investment weakened.
  • Official data show a near $1.2 trillion trade surplus in 2025 driven by sales to non‑U.S. markets, underscoring the economy’s reliance on external demand.
  • The PBOC has pledged reserve‑requirement and interest‑rate cuts in 2026 and, according to Deputy Governor Zou Lan, has trimmed the cost of structural lending tools, signaling targeted easing.
  • Beijing signals a proactive fiscal stance, yet major stimulus appears unlikely due to local‑government debt risks and tolerance for slower growth, with added uncertainty from rising global protectionism and potential new U.S. tariffs.