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China Sets Lower 2026 Growth Goal as Early Data Top Forecasts

Signs of price stabilization point to an economy leaning on manufacturing despite a prolonged property downturn.

A drone view shows an employee working on the production line of aluminium products at a factory in Huaibei, Anhui province, China February 11, 2025. China Daily via REUTERS
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An employee works on the production line for solar panels at a factory of GCL System Integration Technology in Hefei, Anhui province, China May 16, 2024. China Daily via REUTERS

Overview

  • Retail sales rose 2.8% year over year and industrial output climbed 6.3% in January–February, both beating forecasts, while fixed asset investment edged up 1.8%.
  • Real estate investment fell 11.1% in the first two months, a smaller drop than in 2025, underscoring a continuing but moderating property slump.
  • Beijing set a 2026 GDP growth target of 4.5% to 5% at the Two Sessions and outlined a five-year strategy centered on advanced manufacturing and digital technologies.
  • Deflationary pressure eased in February as CPI reached 1.3% year over year, core inflation hit 1.8%, and producer-price declines narrowed to 0.9%.
  • The 2025 headline growth figure of 5.0% contrasts with independent estimates near 2.5% to 3%, with a record $1.19 trillion trade surplus highlighting reliance on exports.