GDP goal of 4.5-5% 'achievable'

China's economy delivered "hard-won" results in 2025, featuring breakthroughs in technological advances and emerging consumption phenomena, setting the stage for a possible GDP growth target of between 4.5 percent and 5 percent this year, according to a veteran economist.

In an exclusive interview with China Daily, Guan Tao, global chief economist at BOCI China, also said the renminbi's recent strength reflects market dynamics rather than a policy push, noting that the currency's internationalization "cannot rely on appreciation to drive it".

On Monday, the National Bureau of Statistics said that China's GDP expanded by 5 percent in real terms in 2025 despite pressures, meeting the country's preset annual growth target of around 5 percent.

Guan, who also serves as the chair of the chief economist professional committee of the Securities Association of China, noted that China not only achieved "hard-won" results in meeting its growth target amid heightened external uncertainty and domestic economic transition, but also saw a clear shift in investor sentiment and global perception.

"In the past, discussions about China often focused on what some called 'old stories' about its traditional growth drivers," Guan said.

"But in 2025, when people talked about China, things like DeepSeek, Ne Zha 2, Unitree humanoid robots, the overseas expansion of innovative pharmaceuticals, and Jiangsu city football league 'Suchao' all showed that China's economy has been full of highlights, whether in consumption recovery or technological innovation."

He added that in contrast to 2018 — when external shocks sent stock and foreign exchange markets falling sharply — the renminbi strengthened in 2025 while the Chinese A-share market hit multiyear highs even under heavy external pressure.

For 2026, Guan said market expectations have increasingly converged on an economic growth target between 4.5 percent and 5 percent, noting that it is both "achievable" and consistent with China's longer-term development goals, including the 2035 objective of reaching the per capita GDP level of moderately developed economies.

Nevertheless, Guan added that low inflation and room for job market improvement suggest that the economy is still running below its potential, leaving space for stronger momentum if macroeconomic policy support and reforms work in tandem.

"If domestic demand strengthens, it can narrow the gap between savings and investment, reduce reliance on overseas markets and support China's import demand, a progress that would help both China and the global economy," Guan said.

On monetary policy, Guan said the moderately accommodative stance is expected to continue with a clearer tilt toward supporting a reasonable recovery in prices. He noted that monetary policymakers have made reflation an explicit consideration — a signal he likened to forward guidance by the US Federal Reserve — meaning policy will likely stay supportive even if the GDP growth target is met while inflation is still below desired levels.

On Monday, interest rates on structural monetary policy tools were cut by 0.25 percentage points as the People's Bank of China, the country's central bank, sought to strengthen financial support to key areas and kick off a solid economic start to the 15th Five-Year Plan (2026-30) period.

Zou Lan, vice-governor of the PBOC, also signaled a readiness to introduce broad-based easing measures, saying that there remains room this year for cuts to interest rate benchmarks and reductions in the reserve requirement ratio, with the strengthened coordination of macro policies to reinforce the foundation for a recovery in price levels.

As for the renminbi, Guan said the recent appreciation in the Chinese currency reflects fundamentals and market forces, rather than a policy choice.

"Renminbi internationalization cannot rely on appreciation to drive it," he stressed, noting that other economies' experiences and lessons have repeatedly shown the risks of trying to lift a currency's global role by promoting exchange rate gains.

According to Guan, the evolution toward a more multipolar international monetary system is likely to continue, with gold emerging as the key beneficiary, with its share in global reserves rising markedly.

"Gold prices still have room to rise, though short-term volatility cannot be ruled out as prices hit record highs and investors may become more cautious in the absence of clear benchmarks,"Guan said, adding that private investment has succeeded central bank purchases as the main driving force for gold prices.

Sun Chi and Lyu Jinkai contributed to this story.