In the 2026 Government Work Report, China has set its main development targets for the year based on current economic realities, aiming for "economic growth of 4.5% to 5%, while striving for a better outcome in practical work." This has drawn significant attention and coverage from numerous international media outlets.
Regarding the 4.5%-5% growth target, some British media have characterized it as China's "lowest in decades" and suggested that "China's economic strategy is shifting from export-led growth towards a model more resilient to external shocks." How should these views be assessed?
**5% is Not a Ceiling** Concerning this year's economic targets, Shen Danyang, head of the drafting group for the Government Work Report and Director of the State Council Research Office, provided a clear explanation during a press conference. He described this "two-part target" as a positive and pragmatic goal that comprehensively considers domestic economic operations and changes in the external environment, balancing necessity with feasibility. It is an objective that "allows for ambitious striving while maintaining steady progress."
Is it accurate for British media to interpret this as China's "lowest GDP target in decades"? Zhao Xijun, Deputy Director of the Management Committee at the National Institute of Financial Research at Renmin University of China, stated that it is inappropriate to simplistically view it as the "lowest in decades" based solely on the number. "This year marks the beginning of the 15th Five-Year Plan period, meaning we are already into the fifteenth five-year plan. Different stages involve different considerations, foundations, and external environments," Zhao said. He emphasized that the key to setting a target is that it must be a scientific and reasonable expectation; otherwise, planning and forecasting lose their meaning. A target set too high without a corresponding foundation or consideration for environmental complexities is not scientific.
In Zhao's view, the ultimate significance of a target is to serve a purpose: to guide the nation from its current starting point, leveraging present conditions to mitigate potential future adverse effects and thereby achieve the goal. Furthermore, setting a range of 4.5%-5% does not imply a cap on development. Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council, stated that this target positioning primarily reflects a "prepare for the worst, strive for the best" bottom-line thinking. With this "floor" established, economic work throughout the year can proceed with clarity and confidence.
Zhang further emphasized that "this setting is not a concession but is intended to strive for better results in practical work. 5% is not an upper limit; actual performance could very well exceed it." Even considering the 5% figure alone, its absolute magnitude is substantial. By 2025, the total scale of the Chinese economy had reached 140 trillion yuan. "A 5% growth means an increase of approximately 7 trillion yuan, equivalent to about 1 trillion US dollars. This scale is comparable to the GDP of a medium-sized country," Zhao Xijun added.
Chen Wenling, former Chief Economist at the China Center for International Economic Exchanges, has previously noted the importance of focusing on the relationship between speed and quality. Although China's current economic growth rate is around 5%, the quality of that growth is visibly and continually improving.
**Consumption as the Primary Engine of China's Growth** Experts consider it one-sided for foreign media to simplistically define China's previous development model as "export-oriented growth." Data from the past five years easily illustrates this point. From 2021 to 2025, the contribution rates of final consumption expenditure, gross capital formation, and net exports of goods and services to China's economic growth were 65.4%, 13.7%, and 20.9% (2021); 32.8%, 50.1%, and 17.1% (2022); 82.5%, 28.9%, and -11.4% (2023); 44.5%, 25.2%, and 30.3% (2024); and 52.0%, 15.3%, and 32.7% (2025), respectively.
"It can be seen that domestic demand—namely, final consumption plus gross capital formation—has contributed approximately 70% to China's economic growth," Zhao Xijun stated. In recent years, China has consistently emphasized expanding domestic demand as the primary driver for economic growth, rather than relying more heavily on exports. In 2020, China proposed the "dual circulation" strategy, aiming to "foster a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other."
Expanding domestic demand has also been a key focus of the Central Economic Work Conference. For instance, in 2021, it called for "effectively implementing the strategy of expanding domestic demand"; in 2022 and 2023, it consecutively emphasized "focusing on expanding domestic demand"; in 2024, it advocated "implementing more proactive and impactful macro policies to expand domestic demand"; and in 2025, it stressed "continuing to expand domestic demand" and "adhering to a domestic demand-led approach, building a strong domestic market."
China also possesses ample policy reserves for unleashing the potential of its ultra-large domestic market. Zhang Liqun anticipates that as cross-cycle and counter-cycle adjustments intensify, the vast potential of the domestic market will be further activated. "The actual effectiveness of expanding domestic demand this year is likely to be better than in previous years and better than expected," Zhang believes. He views this not only as a driving force for domestic economic development but also, through the channel of imports, as crucial support for international trade and even the global economy. The Chinese economy remains a vital force in helping the world economy overcome difficulties.
Of course, China has always emphasized the need to "balance domestic and international imperatives." Zhao Xijun noted that as a major global manufacturing nation, China is closely interconnected with the world, and the development of global industrial chains cannot proceed without China's contribution. In 2025, net exports of goods and services contributed 32.7% to China's economic growth, and China's contribution to global growth has consistently remained stable at around 30%. Zhao Xijun stressed that China's development model and stage cannot be simply summarized by the "export-oriented" label.
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