China’s Ex-Official Predicts 4.5% Growth Over Next Five Years — But Can It Withstand the Slowdown?

Former Senior Chinese Official Says “China to Maintain 4.5–5% Growth Over Next Five Years”
Domestic Demand Remains Weak as Beijing Hesitates on Stimulus
Property Slump Deepens Deflation, Leaving Questions Over Path to Recovery

A former senior Chinese official has expressed confidence that China can sustain an annual growth rate of over 4.5 percent during its 15th Five-Year Plan period (2026–2030), projecting that the economy will retain its momentum despite mounting domestic and external risks. The assessment reflects an optimistic outlook on China’s long-term growth potential. However, many analysts remain skeptical, noting that weak domestic demand and the government’s cautious approach to stimulus measures make such targets increasingly difficult to achieve.

China’s Fragile Growth Outlook

According to the South China Morning Post on October 20 (local time), Zhu Guangyao, who served as vice minister of finance from 2010 to 2018, said at a forum hosted by the Chongyang Institute for Financial Studies at Renmin University in Beijing on October 17 that China would likely maintain an annual GDP growth rate of 4.5 to 5.0 percent over the next five years. He added that such growth would “lay a solid foundation for achieving the government’s goal of basic socialist modernization by 2035,” and expressed confidence that “China will meet this year’s economic growth target,” projecting a full-year rate of around 5 percent.

China’s growth rate showed a notable rebound in the first half of this year. The National Bureau of Statistics reported on October 15 that GDP reached 66.05 trillion yuan (about 9.3 trillion dollars) in the first six months, up 5.3 percent year-on-year. On a quarterly basis, the economy expanded 5.4 percent in the first quarter and 5.2 percent in the second — slightly above the 5.1 percent forecast by Reuters and Bloomberg surveys.

However, analysts warn that the current pace of growth may prove temporary. The recent uptick was largely driven by exports, which rose 5.9 percent while imports fell 3.9 percent, boosting GDP figures. Economists attribute this to Chinese companies rushing shipments during a temporary easing of reciprocal tariffs with the United States. With the trade war still unresolved, many observers believe that a repeat of such growth in the coming quarters is unlikely.

Stimulus Efforts Falter Amid China’s Sluggish Domestic Demand

China’s domestic economy is rapidly losing momentum under what economists describe as an “involution” — a state of hypercompetition marked by deflationary pressure and chronic overproduction. Retail sales last month fell to their lowest level since November last year, while fixed-asset investment from January to September declined 0.5 percent from a year earlier, the weakest since 2020. Real estate investment during the same period plunged 13.9 percent year-on-year, widening from a 12.9 percent drop in the January–August period.

Amid the slowdown, calls are growing for Beijing to step up its stimulus efforts. The government introduced several measures in the second half of last year, but most fell short of expectations. This year, authorities have rolled out consumer subsidies and lowered both the reserve requirement ratio and the loan prime rate (LPR), yet a large-scale, coordinated package has yet to materialize.

Analysts say China may be forced to accelerate new stimulus measures to meet its roughly 5 percent growth target. Rob Subbaraman, chief economist for Asia at Nomura Securities, warned that “the cost of addressing overcapacity and deflation in the short term could further drag on growth,” adding that Beijing is “highly likely to announce additional support measures in the second half.” Bloomberg Economics economists Chang Shu and Eric Zhu echoed that view, noting that “the sharp loss of momentum signals deeper risks such as weakening sentiment,” and suggesting that the People’s Bank of China could implement further monetary easing as early as September.

Limits to Large-Scale Stimulus

Beijing now faces growing constraints in its ability to revive the economy through the kind of large-scale stimulus once fueled by a housing boom. A decade ago, when President Xi Jinping confronted deflationary pressures, his government managed to stabilize the economy by curbing excess supply and igniting a $900 billion housing investment wave. Today, however, the focus has shifted: instead of real estate, Beijing is channeling state support into industries such as steel, automobiles, petrochemicals, and semiconductors—signaling that the property sector no longer serves as the primary growth engine.

The sluggish housing market, in turn, has accelerated China’s deflationary trend. According to the China Index Academy’s September Real Estate Market Trends Report, the average price of existing homes across 100 major cities fell to 13,381 yuan per square meter (about $1,830), down 0.74 percent from the previous month and 7.38 percent year-on-year. The cumulative third-quarter decline reached 2.26 percent—0.14 percentage points deeper than in the second quarter—while prices from January through September dropped 5.79 percent overall.

Rising government debt has added further strain. China’s total debt has surged from just over 200 percent of GDP a decade ago to more than 300 percent today. With key policy rates already at 1.4 percent, the People’s Bank of China has little room left for significant rate cuts. As a result, some analysts argue that Beijing must prioritize structural reform over massive fiscal stimulus. Robin Xing, chief China economist at Morgan Stanley, suggested that “the Xi administration could revamp local officials’ incentive systems to encourage faster consumption rather than excessive investment and production,” adding that “policies transferring more income to households would also help rebalance growth.”