Beijing will likely stick with a ~5% GDP growth target for 2026, but policy remains cushioning over lifting. We expect a flat initial fiscal envelope, a continued focus on tech and public capex, and reactive guardrails for consumption and property – keeping reflation a slow burn. February 24, 2026 12:16 PM GMT China Musings | Asia Pacific NPC Preview: Policy Continuity, Not a Pivot Key Takeaways A 5% national GDP growth target to stay: Two thirds of provinces have trimmed 2026 growth targets, triggering spe ...

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Chinese economy, particularly regarding growth targets and currency dynamics Core Insights and Arguments 1. **Growth Target Adjustment**: Provincial governments in China have set growth targets indicating that the central government is likely to announce a real GDP growth target of "4.5–5%" for the upcoming year, which is lower than the previous "around 5%" target. This adjustment aligns with a forecast of 4.8% real GDP growth, which is above the Bloomberg consensus of 4.5% [2][3] 2. **Currency Strengthening**: The expectation is that the Chinese Yuan (CNY) will appreciate against the US Dollar, with targets of 6.90, 6.80, and 6.70 in the next 3, 6, and 12 months respectively. This appreciation is projected to be around 4% against the Dollar, with minimal impact on GDP growth (a reduction of 10 basis points) and CPI inflation (less than 5 basis points) [2][3] 3. **Inflation and Credit Data**: Anticipated January inflation data suggests a decrease in CPI inflation from 0.8% year-over-year in December to 0.3% in January, primarily due to the timing of the Lunar New Year. PPI inflation is expected to rise slightly from -1.9% to -1.4% year-over-year. New RMB loans are projected at RMB 5 trillion, with total social financing reaching RMB 7 trillion, consistent with consensus expectations [3][4] Additional Important Insights 1. **Local "Two Sessions" Influence**: The outcomes of local "Two Sessions" indicate a trend towards more conservative growth targets at the national level, reflecting a cautious approach to economic management [4][5] 2. **Trade and Industrial Performance**: Despite the anticipated currency appreciation, export volume growth has remained resilient, indicating a potential buffer against the negative impacts of a stronger Yuan on trade [4][5] 3. **Market Sentiment**: There is a noted increase in consumer willingness to spend and improved employment sentiment, despite lower loan demand, suggesting a mixed outlook for domestic consumption [7][8] 4. **PMI Trends**: The unofficial manufacturing PMI showed an increase in January, contrasting with the official manufacturing and non-manufacturing PMIs, which fell during the same period, indicating potential discrepancies in economic activity assessments [7][8] This summary encapsulates the key points discussed in the conference call, focusing on the Chinese economy's growth targets, currency dynamics, inflation expectations, and overall market sentiment.

3 February 2026 | 6:29PM HKT Economics Research China: Local "Two Sessions" point to a lower national growth target this year than last year Bottom line: As of today (3 February), 29 out of the 31 mainland Chinese provinces have officially unveiled their 2026 growth targets during their local "Two Sessions". Among the 29 provinces, 19 lowered their growth targets for 2026. Given recent policy communications, media reports, and signals from local "Two Sessions", we now expect policymakers to lower the nation ...

28 January 2026 China Macro Tracker Economics A more conservative approach to the GDP target China Erin Xin Economist, Greater China The Hongkong and Shanghai Banking Corporation Limited erin.y.xin@hsbc.com.hk +852 2996 6975 Lulu Jiang (Reg. No. S1700523070001) GDP: Local GDP targets starting to be announced, with many lower than last year The national GDP growth target will not be unveiled until the Two Sessions held starting 4 and 5 March, but recent developments suggest Beijing may take a more conservati ...

Summary of Key Points from the Conference Call Industry Overview: China Economic Growth and Targets - China's Q4 real GDP grew by 4.5% year-over-year, achieving a full-year growth of 5.0%, which aligns with the government's target of "around 5%" for 2025 [1][5][7] - Media reports suggest a potential lowering of the real GDP growth target to "4.5-5%" for 2026, which may provide policymakers with flexibility amid geopolitical uncertainties [5][7] Investment Trends - December data indicated strong industrial production growth of 5.2% year-over-year, but domestic demand remained weak, with retail sales increasing only 0.9% year-over-year and fixed asset investment (FAI) dropping by 13% compared to the previous December [1][3] - A significant portion (60%) of the recent decline in FAI is not attributed to economic fundamentals, suggesting that the sharp drop should be interpreted with caution [1] Policy Measures - The Ministry of Finance (MOF) announced new policies to stimulate domestic demand, including interest subsidies for small business loans and a RMB500 billion private investment guarantee scheme [7] - The People's Bank of China (PBOC) implemented modest credit easing measures, including a 25 basis point rate cut for various relending facilities [7] Market Insights - The stock market and consumption trends are being closely monitored, with expectations that a stock market rally could potentially boost consumer spending [8] - Recent data shows that credit growth surprised to the upside in December, indicating a possible shift in economic momentum [8] Additional Insights - The decline in primary property prices in 70 cities accelerated in December, reflecting ongoing challenges in the real estate sector [8] - Trade growth also accelerated in December, suggesting some resilience in external demand despite domestic challenges [8] This summary encapsulates the key points discussed in the conference call regarding China's economic performance, investment trends, and policy responses, providing a comprehensive overview for potential investors and stakeholders.

Summary of Conference Call on Guangdong's GDP Target Industry Overview - The focus is on the economic performance of **Guangdong**, one of China's richest provinces, and its potential impact on the national economy. Key Points 1. **GDP Growth Performance**: Guangdong's GDP growth has been consistently **1.1 percentage points lower** than the national average since 2022, indicating a trend of underperformance relative to both its own targets and the national benchmarks [2][4][12]. 2. **Potential Target Adjustment**: There is speculation that Guangdong may lower its GDP growth target for 2026 from **5% to 4%**. This adjustment could reflect a more realistic assessment of economic conditions [2][3]. 3. **National GDP Target Implications**: Despite Guangdong's potential cut, the national GDP target for 2026 is expected to remain around **5%**. Historically, Guangdong's targets have mirrored national goals, but the current economic context suggests a divergence [4][3]. 4. **Economic Contribution Decline**: Guangdong's contribution to national GDP growth has decreased significantly to **7.9%** since 2022, down from **10.7%** in the previous five years. This decline supports the rationale for a lower provincial target without necessitating a national adjustment [4]. 5. **Government's Pragmatic Approach**: Recent signals from China's leadership indicate a tolerance for slower growth in Guangdong, emphasizing the need to address new economic and social challenges rather than strictly pursuing high growth rates [3]. 6. **Sector Vulnerabilities**: The province's supply chain, particularly in home appliances, furniture, and building materials, has been adversely affected by the housing downturn over the past three years. Additionally, Guangdong's export growth has lagged behind the national average due to its reliance on lower-end manufacturing and greater exposure to the U.S. market [12]. 7. **Future Economic Projections**: Expectations for Guangdong's economic performance in 2026 include a **4.8% real GDP** growth and **4.1% nominal GDP** growth. Fiscal policies are anticipated to be modest and reactive, with a focus on infrastructure support and social consumption subsidies [13]. 8. **Cushioning Domestic Demand**: The anticipated fiscal measures are expected to provide a cushion to domestic demand rather than stimulate significant growth, indicating a continued environment of low inflation rather than reflation [13]. Additional Insights - The discussion highlights the broader implications of Guangdong's economic performance on national policy and the potential for a shift in growth strategies as the province adapts to changing economic realities [2][3][4].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Chinese Economy - **Current GDP Growth**: GDP growth slowed to **4.8% YoY** in **25Q3**, the lowest in four quarters, with a cumulative growth of **5.2% YoY** for the first three quarters of 2025 [1][4][6] Core Insights and Arguments - **Growth Target**: The "around 5%" growth target for 2025 remains achievable, with expectations of **4.5% YoY** growth in **25Q4** to meet the annual target [4][6] - **Structural Concerns**: Long-standing structural issues persist, including a **negative GDP deflator** for the **10th consecutive quarter** at **-1.1%**, indicating ongoing deflationary pressures [5][6] - **Supply-Demand Imbalance**: There is a continued imbalance between supply and demand, with net exports contributing **1.2 percentage points** to the **4.8% YoY** growth in **25Q3** [5][6] - **Policy Expectations**: No policy rate cut or RRR cut is expected in **25Q4E**; focus will shift to the implementation of fiscal and quasi-fiscal policies, with a total of **RMB 1.2 trillion** in announced tools [6][8] Economic Indicators - **Industrial Production**: Industrial production grew **6.5% YoY** in September, surpassing expectations, with an average of **5.8% YoY** for **25Q3** [10][12] - **Retail Sales**: Retail sales growth decelerated to **3.0% YoY** in September, the slowest since December, marking the fourth consecutive month of decline [19][21] - **Fixed Asset Investment**: Cumulative fixed asset investment turned negative at **-0.5% YoY** for January-September 2025, the first negative reading since mid-2020 [17][18] Additional Important Insights - **Trade Talks**: Anticipation of new trade talks between US and China, with a belief that the tariff truce could sustain despite fragility [7] - **Fourth Plenary Session**: The Fourth Plenary Session is scheduled for October 20-23, with expectations for a high-level summary of the **15th Five-Year Plan**, focusing on rebalancing development and risk [7] - **Consumer Behavior**: Elevated household savings rate at **38.3%**, with disposable income rising **4.5% YoY** while expenditure increased only **3.9% YoY**, indicating cautious consumer behavior [24] Conclusion - The Chinese economy is facing a complex landscape with slowing growth, structural challenges, and a cautious consumer environment. The focus on fiscal policy implementation and upcoming trade negotiations will be critical in shaping the economic outlook for the remainder of 2025.