China’s economic growth plans seen as beneficial to entire region

China’s growth target and the nation’s focus on boosting domestic consumption will create opportunities for other countries in the region, a welcome development at a time when geopolitical tensions are clouding the outlook for Asia-Pacific economies, analysts said.

China is aiming for a GDP growth rate of 4.5 to 5 percent in 2026, “while striving for better in practice”, according to a government work report submitted on Thursday to the country’s top legislature for deliberation.

Premier Li Qiang, who delivered the report at the opening of the fourth session of the 14th National People’s Congress in Beijing, said the growth target is well aligned with the country’s long-range objectives through the year 2035 and broadly in line with the long-term growth potential of the Chinese economy.

The closely watched two sessions — the annual meetings of China’s top legislative and political advisory bodies — are being held at a time when escalating tensions in the Middle East are weighing on global economic prospects.

According to the work report, China will also adopt measures to boost household spending, formulate and implement an income growth plan for urban and rural residents and roll out a range of practical measures to enhance the earnings of low-income groups, increase property incomes, and refine the remuneration and social security systems.

Li Wei, a senior lecturer in international business at the University of Sydney Business School in Australia, said the report acknowledges the “increasingly complex external environment” while at the same time signaling “strong continuity” in China’s economic policy direction.

“Policies aimed at stimulating domestic demand and diversifying export markets suggest a broader effort to rebalance growth drivers amid a more uncertain global environment,” Li told China Daily.

Peter T.C. Chang, former deputy director of the University of Malaya’s Institute of China Studies in Kuala Lumpur, said China’s plan to boost domestic consumption “will have enormous global ramifications”.

“As China’s domestic market continues to expand, it is set to become a major driver of global demand,” Chang said.

Lucio Blanco Pitlo III, president of the Philippine Association for Chinese Studies, said China’s focus on bolstering domestic consumption can open opportunities for members of the Association of Southeast Asian Nations. China is ASEAN’s biggest trading partner and a major export market.

“Greater market access to China will be welcomed by ASEAN exporters,” he said. Noting that China is one of the regional bloc’s top sources of investments, Pitlo said ASEAN countries will also benefit from “continued transformative Chinese capital” flowing to the region, especially in the areas of infrastructure, renewable energy, electric vehicles, mineral processing, and industrial upgrading.

The draft government work report said China will launch a new round of initiatives to drive high-quality development in key manufacturing chains and step up industrial foundation reengineering and major technology and equipment research. China will also create new forms of a smart economy and enhance the capacity and quality of the service sector.

“What becomes clearer in this year’s report is the strategic emphasis on high-quality growth driven by technological upgrading and innovation,” said Li from the University of Sydney.

Pipit Aneaknithi, chairman of global sustainability at the Bangkok-based Kasikornbank, said China has made numerous advances in science and technology, demonstrating its leading role in Asia to achieve sustainable growth via technological innovation.

Pipit said this presents opportunities for cooperation between China and ASEAN countries. Thailand, which is aiming to become a regional hub for AI, logistics and digital technology, can benefit by collaborating with China.

“By leveraging each economy’s unique strengths, we can achieve a win-win result,” he said.

Alexis Hooi in Sydney, Yang Han in Hong Kong and Yang Wanli in Bangkok contributed to this story.

China Daily