Nomura: Asia ex-Japan Economics — Chinese Provincial Targets Signal National Goal of 4.5%-5.0%
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Nomura notes that only about half of China's provinces met their 2025 GDP growth targets, hindered by persistent real estate declines, fiscal constraints, and weak consumption. Looking ahead to 2026, approximately two-thirds of provinces have lowered their growth targets. Consequently, Nomura expects Beijing to reduce the national GDP growth target from "around 5.0%" in 2025 to a range of "4.5% to 5.0%" for 2026.
Major economies broadly reduced their goals. Guangdong cut its target to 4.5-5.0% after significantly missing expectations with 3.9% growth in 2025. Guangdong has missed targets for four consecutive years, with its economic gap over Jiangsu narrowing dramatically from RMB 798 billion in 2022 to RMB 335 billion in 2025. Jiangsu, which grew 5.3% last year, lowered its 2026 target to 5.0%.
Nomura highlights that local governments are adopting a more pragmatic approach to economic planning. Given the ongoing property downturn, diminishing returns from trade-in stimulus programs, and manufacturing overcapacity, the first half of 2026 faces strong headwinds. Even the lowered targets will be challenging to achieve. Nomura maintains its full-year 2026 GDP growth forecast at 4.3% and anticipates Beijing will intensify policy support following the Lunar New Year.