Behind China’s 2026 growth target cut are shrinking land sales, weak private investment, and an economy that looks softer than GDP suggests.
China has just wrapped up its Two Sessions, its biggest political meeting of the year, with Beijing setting a 2026 growth target of 4.5 percent to 5 percent—the country’s lowest target since 1991.
For years, Beijing has set steady growth targets to project stability. Analysts told The Epoch Times that the lower expectations point to a deeper problem: The economy may be much weaker than headline gross domestic product (GDP) numbers suggest.
The warning signs, analysts said, are already visible in the data the regime cannot easily adjust: falling tax revenue, another sharp drop in land-sale income, a prolonged property slump, weak private investment, soft consumer demand, and more figures that Beijing has changed, delayed, or stopped publishing altogether.
“When Beijing cut its 2026 growth target to 4.5 [percent] to 5 percent, it did more than lower expectations,” U.S.-based Chinese economist Li Hengqing told The Epoch Times. “It was making a quiet admission that China’s slowdown is no longer a temporary soft patch that can be covered by one neat GDP number.”
The better way to read China’s economy, Li said, is to ask not whether every official number is true or false, but which numbers are hardest to smooth over.
By that measure, he said, the picture is grim.
A Lower Target and a Bigger Signal
Economists and analysts have long doubted the reliability of China’s headline GDP data. Those doubts have intensified in recent years, as visible strains in the economy clash with growth figures that repeatedly land right on target.
Official figures put GDP growth at 5 percent in both 2024 and 2025, hitting Beijing’s target exactly. However, some outside estimates suggest that the regime may have overstated growth by 2 to 3 percentage points.
The Rhodium Group, a New York City-based think tank, estimated China’s real GDP growth in 2025 at about 2.5 percent to 3 percent, with a forecasted growth of 1 percent to 2.5 percent for 2026. Swiss banking group UBS estimated 3.4 percent growth for 2025 and 3 percent for 2026.
The International Monetary Fund (IMF) said the country’s private domestic demand remained weak, headline inflation averaged zero, and the GDP deflator—a broad measure of prices across the economy—continued to decline.
Growth, the IMF said, was supported mainly by exports and policy stimulus.
Chinese officials openly called the insufficient domestic demand a “major issue” and urged action.
“The mismatch is hard to ignore,” Li said, noting that these discrepancies do not line up with a clean 5 percent growth rate.
Gao Shanwen, a prominent economist at the Chinese state-owned SDIC Securities, said at a December 2024 conference in Washington that China’s GDP growth “probably averaged around 2 percent” in the past two to three years even though the official number hovered near 5 percent.
“We do not know the true number of China’s real growth figure and maybe some other numbers,” he said.
By Sean Tseng
