China GDP target 2026: 4.5~5.0% — The Lowest Since the 1990s

In response to slowing household consumption, declining corporate investment, and the ongoing property slump, Chinese Premier Li Qiang stated, “We will prioritize policies aimed at stimulating the domestic economy.”

The Chinese government has officially lowered its 2026 economic growth target to 4.5-5.0%. This marks the lowest target since the 1990s and represents a noticeable shift in tone from its previous commitments to hover around the 5.0% mark. Excluding the anomalous years of 2020 and 2022, China has historically maintained GDP growth rates above 5.0%. This change is indicative of the broader transformation towards a China new economy.

A Conservative Approach Amidst Geopolitical Risks: Spurring the Domestic Economy This move is widely interpreted as a strategy to minimize external shocks by boosting domestic demand while managing the economy conservatively, keeping a close eye on recent Middle East conflicts and the Trump administration’s trade policies.

2025 Record-Breaking Trade Surplus of $1.2 Trillion: Still Driving Growth Last year, China recorded a staggering $1.2 trillion trade surplus, marking an all-time high for the nation. This is particularly noteworthy as it was achieved despite heavy trade pressure from the Trump administration. However, the IMF has pointed out that China’s economy remains highly dependent on trade and requires stronger domestic consumption.

China’s Declining Trade Dependency: 64% (2006) → 38.3% (2022) → 37.3% (2023) China is systematically reducing its reliance on foreign trade. This suggests that the “Dual Circulation” strategy is taking effect, carrying significant economic security implications: buffering against external shocks and reducing mutual dependency with the US.

In the past, China relied on US semiconductor designs, imported materials and equipment from Germany and Japan, and brought in intermediate goods from South Korea to assemble final products. Now, they are moving toward vertical integration within their own borders, gradually reducing overall external reliance. Essentially, they are substituting imports by bolstering domestic capabilities. As a result, we can expect an increase in liquidity within the Chinese capital markets driven by the government’s aggressive domestic stimulus and revitalization policies.

‘New Economy’ Paradigm: EVs, Batteries, Renewables + AI & Robotics

‘Made in China 2025’ Effectively Achieved: Aiming for Qualitative Growth

New Growth Engines: Humanoid Robots and ‘AI+’ In March 2025, the National People’s Congress (NPC) officially launched the ‘AI Plus’ initiative. Unlike the US, which heavily focuses on AI software and services, China is deploying AI to upgrade its manufacturing sector. Prime examples include smart factories, autonomous driving, and advanced logistics systems. Moving beyond the initial ‘New Economy’ pillars of electric vehicles, secondary batteries, and renewable energy, China is rapidly pivoting toward humanoid robotics and artificial intelligence.

The ‘Made in China 2025’ plan, unveiled in May 2015, appears to have effectively reached its fulfillment phase. The focus has now shifted entirely to qualitative growth driven by these new economic engines. Comparing the global assessment of ‘Made in China 2025’ at its inception to today reveals a drastically different landscape.

While China’s capital markets remain notoriously closed and rigid, Chinese equities now warrant serious consideration from the perspective of future growth potential and historically attractive valuations.