SGP(SH:603586) Xin Lang Cai Jing·2026-01-15 03:22Core Viewpoint - The potential for China's economic growth remains significant, and there is a need for confidence in this outlook. The key to achieving this potential lies in upgrading the development paradigm from a development-oriented government to one that promotes comprehensive and high-quality economic development [3][17]. Economic Potential - Recent analysis indicates that the average forecast for China's economic growth potential over the next five years (2026-2030) is 5.2%, reflecting optimism among economists [5][20]. - The supply side of the economy has substantial potential, characterized by significant savings, strong R&D capabilities, and a skilled workforce. Additionally, there are approximately 700 million people who have not yet fully transitioned to modern living standards, indicating vast demand-side potential [6][20]. Current Economic Situation - In the first three quarters of the previous year, nominal GDP growth was 4.2% in Q1, 3.9% in Q2, and 3.7% in Q3, with an estimated annual growth of around 4.0%. The expected nominal GDP growth should ideally be between 7% and 8% when accounting for normal inflation [21]. - The current economic challenges stem from an outdated development paradigm, which needs to evolve to better address contemporary economic realities [21][22]. Government Role and Recommendations - The concept of a "development-oriented government" has been pivotal in Japan's economic success, and China must also upgrade its approach to focus on human development and comprehensive economic growth [22]. - Recommendations include empowering local governments by restructuring public finance, creating committees for human resources development, real estate, international trade balance, and artificial intelligence governance to coordinate investments and address pressing economic issues [24][25]. Short-term Economic Outlook - There are several positive indicators for the current year, including the stabilization of real estate prices in key areas, an optimistic outlook for the stock market, and a potential recovery in nominal GDP growth due to the initiation of major projects and favorable policies [27].