China to Set Lower Economic Growth Target for 2026 Amid Weakening Economy

• China is expected to set a lower economic growth target of 4.5% to 5% for 2026, down from "around 5%" in 2025, as reported by the South China Morning Post.
• This decision, likely made in December, suggests top leaders may not implement aggressive measures to counter the economic slowdown.
• Last year, China's GDP grew by 5%, driven significantly by record exports, which compensated for weak private consumption and declining investment.
• President Xi Jinping has indicated a greater tolerance for slower growth, cautioning against "inefficient" investment.
• Policymakers are not expected to unleash massive stimulus this year due to ongoing concerns about local government debt and a preference for targeted measures.

Why It Matters: China will lower its 2026 growth target to 4.5-5%, signaling a shift towards slower, more sustainable economic development.