China set for faster growth driven by exports: Goldman Sachs

China’s real exports may grow by five to six per cent annually over the next few years, according to a new forecast by Goldman Sachs Research. This is up from its earlier estimate of two to three per cent, as Chinese products gain ground against global rivals.

China’s real GDP forecast for 2025 has been raised from 4.9 per cent to 5 per cent, while projections for 2026 and 2027 have been increased sharply to 4.8 per cent and 4.7 per cent respectively. The upward revision reflects the surprising strength of exports in 2025 despite steep US tariff swings earlier in the year.

China’s real GDP forecast for 2025 has been raised from 4.9 per cent to 5 per cent, while projections for 2026 and 2027 have been increased sharply to 4.8 per cent and 4.7 per cent respectively. The upward revision reflects the surprising strength of exports in 2025 despite steep US tariff swings earlier in the year.

Chinese real exports are expected to close the year with around eight per cent growth, demonstrating cost and scale advantages relative to producers in Europe and Japan.

However, analysts said that ‘China Shock 2.0’ may come at the expense of other advanced manufacturing economies. Goldman Sachs Research estimates that for every one percentage point export-driven increase in China’s GDP, competing economies may experience a drag of 0.1 to 0.3 percentage points.

It’s not that Chinese exports are immune to tariff impacts. “In categories like toys, footwear, garments, where it’s labour intensive and margins are relatively thin, when you add tariffs, you do see large declines,” Hui Shan, Goldman Sachs research economist said in a Goldman Sachs Exchanges podcast.

The outlook for China’s manufacturing received additional support after the Chinese Communist Party approved the proposal for its 15th Five-Year Plan, spanning 2026 to 2030. The blueprint prioritises upgrades to heavy industries such as textiles and chemicals, alongside expansion in new-energy and emerging technology sectors. The plan is set to receive extensive backing across logistics, financing and policy, with the final version expected to be endorsed by the National People’s Congress in March.

Domestically, policymakers reiterated their ambition to lift per capita GDP to moderately developed-economy levels by 2035, which implies average annual growth of about 4.5 per cent from 2026 to 2030. Economic measures aligned with this target are expected to include interest rate cuts—10 basis points each in the first and third quarters next year—alongside fiscal expansion and accelerated credit issuance to support industrial investment and consumption.

Other encouraging news out of the plenum, Shan added, were signals that the government will strive to raise the consumption rate over the next five years.

“They want to promote income growth along with economic growth.  However, our takeaway is still that the top priority is to double down on the industrial system, on the technology self-reliance, and on becoming even more competitive in manufacturing and to outcompete global peers, gaining global market share,” Shan concluded.

ALCHEMPro News Desk (HU)