China leans on exports as Beijing holds off big stimulus
China's economy is leaning heavily on exports and manufacturing to sustain growth, as Beijing resists calls for a large-scale domestic stimulus and focuses on longer-term industrial goals.
The government lowered its 2026 growth target to between 4.5% and 5%, broadly in line with market expectations, though some analysts believe the economy is expanding at a slower underlying pace. Officials have signalled a preference for stability and risk management over broad demand stimulus.
Exports have been a bright spot, rising sharply over the same period a year earlier, which has reduced the urgency for a big fiscal package. But there are warning signs: manufacturing capacity utilisation has fallen close to a decade low, pointing to overcapacity and weak domestic demand.
Policymakers are betting on supply-side strength rather than consumption. The country's new five-year plan prioritises industrial upgrading, technological self-reliance and advanced manufacturing, alongside goals such as a green transition.
The direction matters far beyond China's borders. As the largest trading partner for many African and developing economies, China's demand for commodities and its export competitiveness shape global prices, investment flows and the prospects of nations tied closely to its vast industrial machine.
