According to data from the National Bureau of Statistics, China's economy achieved 5% real growth in 2025. In an exclusive interview, Guan Tao, Global Chief Economist at BOC International (China) Co.,Ltd., stated that the performance of China's economy in 2025 presented three major highlights: first, despite facing internal and external pressures, major economic indicators met the targets set at the beginning of the year; second, the macroeconomic narrative has shifted significantly, with consumption recovery and technological innovation standing out; third, the stock and foreign exchange markets withstood external shocks and operated soundly.
Looking ahead, he pointed out that the market generally expects the real GDP growth target for 2026 to be set within a range of 4.5% to 5%. Currently, with low inflation levels and room for improvement in the job market, it indicates the economy is still operating below its potential level. He emphasized the need to persist with both policy support and reform and innovation, and to implement more proactive macroeconomic policies. China's expansion of domestic demand will help increase import demand, which holds positive significance for the global economy.
Guan Tao indicated that the trajectory of China's economy in 2025 was primarily influenced by two major variables: on one hand, heightened external uncertainties, particularly extreme tariff pressures; on the other hand, the Chinese economy is in a critical stage of transitioning between old and new growth drivers.
Against this backdrop, China's economy not only achieved its major annual targets, including approximately 5% GDP growth, but also saw a noticeable shift in investor sentiment and the global perception of the Chinese economy.
"In the past, discussions about China always focused on the 'old stories' related to traditional growth drivers," Guan Tao said.
"But in 2025, when people talk about China, the conversation has turned to new things such as DeepSeek, 'Nezha 2', Yuren humanoid robots, innovative drugs going global, and the Jiangsu City Football League 'Jiangsu Super League'."
He further added that unlike the situation in 2018 when external shocks led to a simultaneous slump in stocks and the currency, in 2025, despite extreme external pressure, the renminbi exchange rate strengthened against the trend, and the A-share market even hit multi-year highs.
Looking ahead to 2026, Guan Tao noted the market's broad expectation for an economic growth target range of 4.5% to 5%. He considers this range "realistic and achievable," and consistent with China's long-term goal of reaching the per capita GDP level of a medium-developed country by 2035.
He also pointed out that the current low inflation levels and the room for improvement in the job market suggest the economy is still operating below its potential. If macroeconomic policy support and reforms work in synergy, the momentum for future economic growth is expected to improve further.
Regarding monetary policy, Guan Tao stated that an appropriately accommodative stance is expected to continue, with greater emphasis on promoting a reasonable rebound in prices. He noted that the central bank has explicitly listed price recovery as a key consideration for monetary policy, likening this signal to the Federal Reserve's forward guidance. This implies that even if GDP growth targets are met, monetary policy support will likely persist if inflation remains below ideal levels.
He also believes that further reductions in the reserve requirement ratio or interest rates are still possible, but such measures are not essential. Preferential interest rate policies and structural monetary policy tools can also help reduce financing costs for the real economy.
Guan Tao emphasized that boosting domestic demand is crucial for China's sustainable economic growth and also holds positive significance globally.
"If China's domestic demand can continue to improve, it will help narrow the gap between savings and investment, reduce China's reliance on overseas markets, and also help increase China's import demand from abroad. This has positive implications not only for the sustainable development of the Chinese economy itself but also for the global economy," he said.
Regarding the renminbi, Guan Tao stated that the recent appreciation of the renminbi stems from economic fundamentals and market forces, not policy choices.
He emphasized, "The internationalization of the renminbi cannot be driven by appreciation," pointing out that the experiences and lessons of other economies repeatedly prove that attempting to enhance a currency's global status by pushing for exchange rate appreciation carries significant risks.
"In the long run, it should be that 'a strong economy leads to a strong currency'," he added, stating that as China's economy progresses steadily and travels far, the international holding and use of the renminbi will naturally become more widespread.
Guan Tao also discussed recent policy adjustments concerning the digital renminbi. The central bank recently issued an action plan to further strengthen the digital renminbi management service system and related financial infrastructure. It clarifies that starting January 1, 2026, a new generation of digital renminbi measurement frameworks, management systems, operational mechanisms, and ecosystems will be fully implemented, marking the digital renminbi's transition from the era of digital cash to the era of digital deposit money.
Guan Tao said this change, by allowing commercial banks to incorporate the digital renminbi into balance sheet management, helps provide more incentives for users and commercial banks to use the digital renminbi. Simultaneously, through broader practical application of the digital renminbi, it supports the construction of an independent and controllable cross-border renminbi payment system.
Guan Tao believes the trend towards a multipolar international monetary system will continue, but the biggest beneficiary of this shift is not non-US currencies. Instead, as the US dollar's share declines, gold has become a key winner, with its share in global reserves rising significantly.
He also noted that private gold purchases replaced central bank buying as the main driver of gold prices in 2025. This trend is likely to continue, considering that gold's share in private investment portfolios is currently just over 2%, whereas this figure once reached 7% to 8% in the early 1980s.
Guan Tao believes there is still room for gold to rise. He also cautioned, "Short-term fluctuations cannot be ruled out, as after gold prices hit record highs, they lack a reference point, and it's possible that people have a 'fear of heights' psychology."
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