As China's annual "two sessions" kicked off in Beijing, GDP growth target of 4.5% to 5% was set for 2026, according to the Government Work Report of the State Council on March 5.
With the 15th Five-Year Plan period on the horizon (2026-2030), fresh data shows China's GDP exceeded 140 trillion yuan ($19.4 trillion) in 2025, achieving 5% growth—a rate that places it among the fastest-growing major economies worldwide. This marks the fourth significant economic leap in just five years, a trajectory achieved despite mounting internal and external pressures.
The numbers tell a compelling story. "I think not many people expected such a growth rate for last year," says Klaus Mühlhahn, president of Zeppelin University and a renowned German historian and Sinologist, reflecting on China's 2025 economic performance.
Focus on domestic consumption
Looking ahead to 2026—the starting point of China's 15th Five-Year Plan—Mühlhahn identifies a critical priority: strengthening domestic consumption. "Right now China is a country that depends a lot on exports. But if you want to reduce the dependency on exports. The only possibility is to strengthen consumers at home."
He suggests the new five-year plan should focus on "how to bolster consumer confidence, how to make sure that more of the products that China makes remain in China and are consumed in China." This aligns with official priorities: final consumption expenditure already contributed 52% of economic growth in 2025, up five percentage points from the previous year.
Exports drive resilience
For Mühlhahn, the primary driver behind this resilience is unmistakable. "One of the main drivers has been Chinese exports, because China was able to export a lot of goods, electric vehicles, and really high-value goods, not only to Europe but also to many other parts of the world."
Official figures show that total goods imports and exports reached a record 45.47 trillion yuan in 2025, with technology product exports surging 13.2% year-on-year across electric vehicles, integrated circuits, and semiconductors.
Beyond the sheer volume, however, lies a more profound transformation. "It's very clear that China has moved away from being the final point of assembly for a lot of goods, and then sending them into the world, and has become an economy that is technologically very advanced," Mühlhahn notes. He points to batteries and EVs as prime examples where "China has a lead, has technologies that other countries don't offer."
A diversified global market
This technological ascent has been accompanied by deliberate market diversification. Despite rising trade protectionism and certain countries resorting to tariff measures, China's foreign trade has continued to expand. "China has been able to successfully diversify and gain access to more markets, such as South America, Africa, and Central Asia," Mühlhahn observes. "China is now the biggest trade partner for over 120 countries in the world."
This strategic shift has reduced dependence on any single market—while exports to the U.S. declined by nearly 10%, flows to other regions have correspondingly increased.
Such deep global integration naturally positions China as a stakeholder in open trade. "I think it's very clear that because China is involved with so many countries in the world, China has also sort of become an advocate for open markets and for free trade," Mühlhahn states. "I think that is a good thing, because if we close the markets, I think all of us, all the economies will suffer." With China expected to contribute around 30% of global economic growth, its commitment to multilateralism carries significant weight in today's fractured trade environment.
Prospects for EU-China cooperation
The emerging policy blueprint for 2026-2030 reportedly emphasizes frontier industries including quantum technology, biomanufacturing, hydrogen energy, brain-computer interfaces, and 6G—areas where Mühlhahn believes the global race remains wide open. "We need to learn from China in many ways," he says, quoting German business leaders who recently accompanied Chancellor Merz on a visit alongside 30 of the country's largest firms, many with deep roots in China. They returned describing China in "very positive terms" and seeing "a lot of potential for joint projects, for joint products, for joint developments."
The 5% growth target, Mühlhahn notes, "is in correspondence with the targets that China has had in the past"—a signal not just of ambition, but of the consistency that markets seek in uncertain times. As the "two sessions" unfold, all eyes will be on how this target translates into concrete policy measures across technology, consumption, and reform.
Reporter: Guo Zedong
Video capature: Guo Zedong
Video: Pan Jiajun
Cover: Lai Meiya
