China’s GDP target remains “reasonable” as the country enters a key transition phase, according to Betty Wang, head of Northeast Asia Research at Oxford Economics. In an interview, Wang said the next five years will be critical. External pressures are rising. Meanwhile, structural challenges at home are intensifying. As a result, China can no longer rely on the old investment-driven growth model.
She identified weak effective demand as the main constraint on economic recovery. Data from the National Bureau of Statistics show fixed-asset investment fell 3.8 percent year-on-year in 2025. In the first 11 months, it dropped 2.6 percent. At the same time, retail sales grew just 0.9 percent in December, down from 1.3 percent a month earlier. These figures reflect soft investment and cautious consumer spending.
Wang said the prolonged property downturn has hurt private investment and household spending. In addition, infrastructure investment led by local governments and State-owned enterprises has slowed. Therefore, overall investment growth remains subdued.
Although authorities introduced measures such as consumption vouchers and trade-in programs, Wang described them as mostly short-term support. She stressed that policymakers should shift focus from rigid growth targets to improving growth quality.
Over the next five years, China must transition from a property- and investment-led model to one driven by consumption, services and a stronger private sector. Effective markets and better governance will also be key.
Wang expects fiscal and monetary policies to stay accommodative. The fiscal deficit ratio rose to around 4 percent in 2025 and may remain elevated in 2026. Moreover, monetary policy still has room to ease, with possible interest rate cuts ahead.
She emphasized that restoring private sector confidence is vital. Private firms contribute over 60 percent of GDP and 80 percent of urban jobs. Stronger support would stabilize employment and boost household income expectations. Robert Koopman, former chief economist at the World Trade Organization, echoed her view. He said China is likely to become a major center of global demand in the next decade.
