中文
By Warwick Powell
Lead: For China, a lower growth target does not mean lower ambitions. Analysts calling it a sign of weakness may be missing the point entirely.
Western commentators have rushed to frame China's newly announced 2026 GDP growth target of 4.5-5% — set at the recent "two sessions" and outlined in Premier Li Qiang's government work report — as evidence of economic frailty and a tacit "shift to defense." Headlines describe the range as the "lowest in decades" or even on record since the early 1990s, attributing it to property-sector strains, external tariffs and softening domestic demand.
This interpretation is a classic category error. It conflates a deliberate policy choice with decline, ignores China's long-term strategic architecture, and overlooks the limitations of GDP itself as a measure of national vitality. In reality, the target embodies a calibrated transition toward high-quality development that secures the 2035 goal of basically realizing socialist modernization while renewing the economy's energetic foundations.
China's development path has always been staged and purposeful. The first centenary goal — building a moderately prosperous society (xiaokang) in all respects — was achieved by 2021, with the eradication of extreme poverty for nearly 100 million people.
The second stage, set out in the 19th National Congress of the Communist Party of China and reaffirmed in subsequent plans, is the basic realization of socialist modernization by 2035. This is not a vague aspiration but a concrete benchmark: per capita GDP reaching levels of moderately developed countries, a vastly expanded middle-income group, equitable public services, narrower urban-rural gaps and a green, low-carbon economic system.
A compound annual growth rate of 4.5-5% is not "sluggish"; it is arithmetically aligned with these objectives. From the current base, such growth compounds reliably toward the 2035 thresholds without the overheating risks of earlier double-digit expansion.
Policymakers are not lowering ambitions out of weakness; they are right-sizing quantitative targets to enable qualitative leaps, providing flexibility amid global uncertainties while signaling a continued emphasis on high-quality, innovation-driven development. Decades ago, during China’s double digit economic boom, overheating sparked widespread concerns over inflation, excessive investment, and financial irregularities. Steady, high-quality growth has since become a key national goal.
GDP, moreover, has never been the sole or even primary metric of success in Chinese planning. Even Simon Kuznets, the economist who pioneered modern national income accounting in the 1930s, repeatedly warned of its limitations as a measure of social well-being. In his seminal 1934 report to the U.S. Congress and later writings, Kuznets stressed that GDP was never intended to capture welfare, distributional equity, nonmarket activities, or qualitative improvements in living standards; it could, he cautioned, lead to "absurd" conclusions if treated as such.
Conventional GDP accounting struggles to reflect the full spectrum of social and economic well-being in a system oriented toward common prosperity. It underweights investments in human capital, ecological restoration, technological self-reliance, and distributional equity. China's emphasis on "people-centered development" prioritizes outcomes such as improved life expectancy, educational access, digital inclusion and reduced inequality — dimensions that generate resilience long after headline growth moderates. A narrow GDP lens misses how public goods and innovation ecosystems compound societal welfare.
Nowhere is this clearer than in the advance of common prosperity — the core animating vision of a modern socialist society. Real wage and disposable income growth has averaged about 5% per year in recent years, with gains accelerating especially outside the major coastal cities. National per capita disposable income grew at a comparable rate, while rural residents recorded stronger gains of about 6%, outpacing their urban counterparts and narrowing the longstanding urban-rural divide.
This wage expansion came alongside steady surveyed urban unemployment of about 5.2%, sustained output growth and industrial capacity utilization averaging 74%. Together, they point to a system in stable, balanced growth — not running hot, nor scraping the bottom, but cruising at a sustainable velocity with ample room to accelerate if external conditions or domestic needs demand it.
Compounding this misreading is the conservative nature of China's GDP methodologies. Unlike some Western systems that aggressively capitalize intangibles or services, China's approach — evolving from material-product roots but refined through national censuses and international alignment — tends toward prudence.
Historical reviews, including World Bank assessments in the 1990s, documented systematic underestimation of the service sector before comprehensive adjustments raised output figures. Contemporary trade-data discrepancies similarly suggest official net-export contributions may understate rather than inflate GDP. This methodological restraint ensures targets remain credible and achievable, not inflated for political optics.
The most profound dimension of the current strategy, however, lies beyond accounting altogether: a qualitative transformation in the economy's thermodynamic base. Economic activity is ultimately constrained by energy return on energy invested (EROEI) — the net energy surplus available after accounting for extraction, conversion and delivery costs. Mature fossil systems worldwide have seen declining EROEI; China's own legacy oil fields exemplify this trend. In contrast, the country's unprecedented scale-up of renewables is rebuilding the energetic substrate for higher system-wide returns.
China installed more than 360 GW of wind and solar capacity in 2024 alone — over half the global total — pushing renewables to roughly one-third of worldwide installed capacity. Clean-energy investment and production now contribute the equivalent of an entire national economy's GDP (around 13.6 trillion yuan, or $1.9 trillion in recent data) and grow three times faster than the broader economy.
Solar, wind and storage technologies deliver EROEIs typically above 10 and rising, far outpacing aging thermal assets when system integration, manufacturing efficiencies and grid modernization are factored in. By embedding these high-EROEI technologies into new quality productive forces, China is achieving a structural shift that enhances energy sovereignty, lowers long-run costs, and generates exportable surpluses in batteries, electric vehicles and green tech.
This is not defensive hunkering-down; it is proactive recalibration. Export resilience in recent years, even amid tariffs, has demonstrated the model's strength: diversified markets and technological leadership sit alongside domestic adjustments.
The pivot to high-quality growth — innovation-driven, demand-led and ecologically sustainable — positions China to meet its 2035 objectives without the resource intensity or vulnerability of past models. Far from conceding ground, Beijing is constructing an economy that is more resilient to external shocks precisely because it is less dependent on volatile fossil imports and low-EROEI legacy infrastructure. The real-wage story reinforces this: rising incomes, particularly in less-developed regions, are channeling productivity gains into household consumption and social stability, the very foundations of common prosperity.
The Western narrative's persistence reveals more about the observers than the observed. Accustomed to viewing growth through a post-industrial, finance-heavy prism, many analysts struggle to recognize a developmental state that treats GDP as servant, not master.
They miss how China's targets reflect confidence, not capitulation. Beijing is willing to accept moderate quantitative expansion in exchange for qualitative supremacy in the technologies that will define the 21st century — progress measured not just in growth figures but in living standards and energy renewal.
For global policymakers, clinging to this misinterpretation carries risks. It encourages containment strategies that ignore the complementary opportunities in clean-tech supply chains, green finance and sustainable development cooperation.
A clearer-eyed assessment would see China's 4.5-5% trajectory not as evidence of decline but of disciplined execution. The goal is a vision of socialist modernization that delivers tangible prosperity for 1.4 billion people while contributing to global stability in the process.
China's growth targets are no rearguard action. They embody a deeper strategic logic: quantitative discipline married to qualitative ambition, conservative measurement paired with transformative investment. The aim is a thermodynamic renewal that promises higher returns for decades to come, while advancing common prosperity through broad-based real income growth. The world would do well to interpret them on their own terms rather than through the distorting lens of outdated paradigms.
Warwick Powell is an adjunct professor at Queensland University of Technology.
