4.5–5% growth target seen as achievable

China's economic growth target of 4.5 to 5 percent is a realistic goal based on current international conditions and the country is capable of exceeding this range while continuing to serve as a primary engine for the global economy, said Justin Yifu Lin, a member of the Standing Committee of the Chinese People's Political Consultative Conference (CPPCC) National Committee.

Lin, who is also a professor of economics at Peking University, emphasized that this growth target is grounded in the principle of seeking truth from facts. It represents a flexible goal range rather than a rigid ceiling.

He expressed strong confidence that China's contribution to global economic growth will remain robust. Since 2008, China has consistently contributed approximately 30 percent to world economic growth annually. Lin said preliminary statistics suggest this contribution rate might have climbed even higher recently, estimated to reach around 39 percent.

This performance is particularly significant given the sluggish global growth. According to forecasts by the International Monetary Fund, the global economy is projected to grow by just 3.3 percent in 2026 and 3.2 percent in 2027.

Lin argued that China's ability to maintain such a high contribution rate — significantly outpacing these global averages — underscores the resilience of its economy amid profound global changes "unseen in a century". While other major economies grapple with significant downward pressure, China's steady growth trajectory highlights its unique role as a stabilizer in the international arena.

Regarding the Government Work Report's emphasis on expanding domestic demand, Lin highlighted that China's vast domestic market is a key advantage. While investment remains a crucial pillar for economic resilience, consumption is the vital link to unlocking this potential. He analyzed three critical factors influencing consumption: income levels, the availability of suitable products and consumer confidence.

Lin said disposable income growth has largely kept pace with economic growth, suggesting that income levels are not the primary constraint. Instead, a major challenge lies in the supply side's ability to meet evolving demand for higher quality, diversity and emotional value. He cited the popularity of "Labubu" toys as a prime example of how "emotional consumption" and innovation can succeed both domestically and abroad.

To further address this mismatch between supply and demand, the National Development and Reform Commission released a notice late last year promoting large-scale equipment renewal and the trade-in of consumer goods. This policy is designed to accelerate the construction of a new development pattern and promote high-quality development. By encouraging the replacement of old goods with newer, higher-quality alternatives, the initiative is expected to serve as a powerful driver for both investment and consumption growth, directly addressing the supply-side issues Lin identified.

However, Lin said consumer confidence remains a crucial variable. Despite rising incomes, a substantial amount of consumption potential remains dormant, evidenced by the sharp rise in household savings.

In 2024 alone, household savings increased by 14 trillion yuan ($2.03 trillion), bringing the total to approximately 150 trillion yuan, Lin noted. This massive figure indicates that consumers have the financial capacity to spend, but are hesitant to do so due to uncertainties regarding future development.

The professor attributed this reluctance to a combination of factors, including geopolitical tensions and the transformation pains of traditional industries. He urged a focus on seizing opportunities to "ride the wind and waves", noting that restoring confidence would release this pent-up purchasing power.

Addressing the "silver economy", Lin described it as a realization of a people-centered development philosophy. Data from the National Bureau of Statistics reveal the scale of this demographic: the population aged 60 and above has reached 323.38 million, with those aged 65 and above numbering 223.65 million. Notably, a significant portion of the elderly population falls into the 60-64 age range — the "young-old" — who generally possess good health and a strong willingness to participate in social life.

Lin suggested a two-pronged approach to tap into this potential: first, increasing pension levels to enhance senior citizens' purchasing power; and second, developing specific goods and services tailored to their unique needs.

By aligning supply with the specific demands of this massive and growing demographic group, China can create new market demand while ensuring the elderly are well-cared for, thereby allowing them to play an active role in consumption upgrading, Lin said.

renqi@chinadaily.com.cn