Commentary: China lowers growth target - it still isn't low enough

Are China’s latest economic growth targets a sign of stabilisation or decline? Neither framing fits, says Enodo Economics’ Diana Choyleva.

LONDON: China’s 2026 economic growth target of 4.5 to 5 per cent is its lowest in decades, moving off the 5 per cent anchor of the past three post-pandemic years. This has been widely read as a moment of reckoning.

That the target was unveiled during the Two Sessions, China’s biggest annual political gathering, alongside details of the 15th Five-Year Plan for the world’s second-largest economy is important context. This is not just an annual calibration but the opening statement of a strategic framework.

But the number to note is actually 2 to 3 per cent. That is Enodo Economics’ estimate of China’s potential growth rate - the speed at which the economy can expand without generating inflation pressure. 

The gap between that figure and the official target captures the bind Beijing is in, and how far it still has to travel.