Goldman Sachs China Economic Outlook: All About Tech

Goldman Sachs characterizes China's 2026 economic narrative as centered on technology, forecasting real GDP growth of 4.7%, comfortably within the government's 4.5%–5% target range. While the property sector has yet to bottom out, structural shifts toward exports and tech manufacturing are expected to mitigate broader economic drags.

Inflation is projected to recover significantly. Producer prices are anticipated to shift from a 2.6% deflation rate in 2025 to 2.0% growth in 2026, driven by rising energy costs and anti-price-war regulations. Consumer price inflation should rise to 1.0%. This reflation occurs alongside an anticipated fiscal expansion, with the broad fiscal deficit widening by one percentage point to 12.0% of GDP, while the PBOC maintains policy rates at 1.40%.

The yuan is expected to appreciate gradually, reaching 6.50 against the USD over 12 months and 6.70 by end-2026, supported by an expanding current account surplus and increased foreign exchange settlement by exporters.

The 15th Five-Year Plan solidifies a barbell growth strategy, prioritizing advanced manufacturing, AI, and national security alongside social objectives. Growth resilience is increasingly concentrated in technology-intensive and export-oriented sectors. Although the real estate cycle wanes, sustained government consumption and targeted industrial policies are set to anchor medium-term momentum.

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