China accepts slower growth
Chinese leaders are signaling they may tolerate slower growth instead of reverting to large, credit‑fuelled stimulus programs of the past. Analysts remain split on the property recovery timeline — some warn of a long, Japan‑style adjustment — while China’s renewables and broader energy build‑out are helping cushion supply shocks from Middle East disruptions. (bloomberg.com) (scmp.com) (freemalaysiatoday.com)
China has lowered its 2026 growth target to 4.5% to 5%, signaling it is willing to live with a slower economy instead of launching another big credit binge. (gov.cn) Premier Li Qiang delivered that target at the National People’s Congress on March 5, after China had kept its goal at “around 5%” for the previous three years. China also set a consumer inflation goal of around 2%, an urban unemployment target of around 5.5%, and a goal of more than 12 million new urban jobs. (gov.cn) (channelnewsasia.com) Private forecasts have moved lower too. A Reuters poll published on January 15 put China’s 2026 growth at 4.5%, with the same pace expected in 2027, as economists pointed to weak domestic demand and long-running property stress. (usnews.com) Property remains the biggest argument over how long this slower phase lasts. Bloomberg reported on March 16 that new-home prices in 70 cities fell 0.28% month on month in February, after a 0.37% drop in January, while resale prices fell 0.43%, the smallest decline in 10 months. (bloomberg.com) Some analysts see a floor forming in the largest cities. A China Index Academy survey released on April 1 showed new-home prices in 100 cities rose 0.05% in March after a 0.04% fall in February, helped by higher-end projects in core cities. (usnews.com) Others still warn the clean-up could take years, not quarters. The South China Morning Post said analysts are split between a near-term stabilization view and a more drawn-out adjustment that resembles Japan’s long property hangover after its asset bubble burst. (scmp.com) China is trying to offset that drag by leaning harder on manufacturing, technology and energy. The National Energy Administration said renewable additions reached 310 million kilowatts in the first three quarters of 2025, up 47.7% from a year earlier and equal to 84.4% of all new power capacity. (gov.cn) That build-out is now being tested by war-driven supply shocks. Analysts told Agence France-Presse on April 12 that China’s stockpiles and diversified energy mix are cushioning the hit from the Iran war, even though more than half of its seaborne crude came from the Middle East last year, according to Kpler. (france24.com) (freemalaysiatoday.com) The trade-off is clearer now than it was a year ago. Beijing is still supporting growth, but the official target, the property data and the energy push all point to the same choice: slower expansion now, with fewer of the debt-heavy rescues that defined earlier downturns. (gov.cn) (bloomberg.com)
