It reflects an admission of failure, manipulation of expectations, and face saving for the regime, according to analysts.
China has set its lowest economic growth target in decades for this year, at 4.5 to 5 percent.
Beijing has maintained its target at “around 5 percent” for the past three years, and last year, it reported a growth rate of exactly 5 percent—no more and no less.
The regime has long projected a bright economic outlook by overstating its economic data, said Yeh Yao-yuan, a professor of international studies at the University of St. Thomas in Houston. Yet if Beijing had continued to claim the same 5 percent growth rate this year, Yeh said, it could have come across as a “cruel irony” to the people. Amid the collapsing property market and shrinking export sector, ordinary Chinese citizens have felt the deterioration of economic conditions.
At the same time, the regime cannot allow the growth target to fall too low, as that could trigger fears of an economic crisis.
In Yeh’s view, “manipulation of people’s expectations and mentality”—while still preserving the regime’s face—ultimately led Beijing to settle on the current range.
Although meeting the annual growth target is a “political assignment” that involves massaging statistics, the departure from the 5-percent benchmark is significant, according to William Lee, chief economist at consultancy Global Economic Advisors.
Breaking the streak, Lee said, amounts to the “biggest admission of failure” from the Chinese regime.
“They realize that anything even close to 5 [percent] would be absurd. Their model of growth is starting to show strain,” he told The Epoch Times. “Their dependence on export-led growth, without the U.S. market, is a huge vulnerability.”
Despite a planned summit between U.S. President Donald Trump and Chinese leader Xi Jinping—now postponed—the outlook for China’s exports remains uncertain.
A Masked Export Story
Exports have remained one of the few bright spots in China. The Rhodium Group estimated that external trade accounted for more than half of last year’s increase in China’s total economic output. The company expects exports to pull the same weight in China’s 2026 economic outlook.
In addition, Rhodium estimates that the world’s second-largest economy actually grew at about half of the official rate in 2025 and has grown at a rate below 3 percent since 2022.
On paper, China appeared to begin this year with robust exports, up nearly 22 percent year-on-year, far exceeding analysts’ expectations of 7 percent.
Stronger exports to Southeast Asian and European Union countries helped offset the drop of more than 30 percent in goods flow to the United States. The year-on-year export growth to the two regions was nearly 30 percent for the first two months of 2026. As a result, China’s trade surplus surged to more than $200 billion, a 25 percent increase from a year earlier.
But some analysts say that the numbers may be misleading.
Lee described China’s official export data as “artificial,” interpreting the surge as inventory building for transshipment rather than final sales. In other words, those goods may have crossed China’s borders but are still in transit, looking for end buyers.
In principle, a country’s exports should match its trading partners’ imports. In practice, small discrepancies are common because exports are recorded differently from imports. These factors typically account for a gap of about 5 percent to 10 percent, according to the United Nations and the Organisation for Economic Co-operation and Development. Differences larger than about 15 percent may signal misreporting or transshipment through third countries.
The difference between China’s reported exports to the United States and the United States’ reported imports from China is 22 percent. The gaps in China’s trade numbers are higher with some other countries, including Russia, with which the gap is 87 percent.
Other economic indicators also cast doubt on the strength of China’s export sector.
By Terri Wu
