China Poised to Tolerate Slower Growth After Barely Hitting Target Last Year

Key Takeaways

• China’s economy reached its 5% growth target for 2025 according to official government data, but momentum slowed throughout the year.
• Beijing will likely target 4.5% to 5% growth this year, providing flexibility to pursue long-term development goals and account for external challenges.
• Domestic demand remains weak, highlighting the need to address underlying structural issues and the potential for increased social spending in 2026.