As the fourth session of the 14th National People's Congress convened in Beijing, the government work report has set China's growth target for 2026 at 4.5% to 5% — the first year of the 15th Five-Year Plan period.
For John Ross, senior fellow at the Chongyang Institute for Financial Studies at Renmin University of China and former director of the Department of Economic and Business Policy in London, this target is firmly grounded in long-term planning.
"If we take that, that means that China's GDP had to grow at 4.7% a year between 2020 and 2035," he explains, referencing the official goal of reaching mid-level advanced economy status by 2035. "So 4.5 to 5% is exactly in line with this target."
R&D and investment: the twin engines
Behind the headline figure lies a structural transformation that sets China apart. The country spends 2.6% of GDP on research and development — nearly twice the level of any other developing economy, and higher than three G7 members. But innovation alone is not enough.
"As long as an innovation is just an idea, it doesn't change very much," Ross notes. "What is important is when the innovation is turned into a product."
Here, China's second advantage comes into play: investment. At roughly 40% of GDP, China's investment rate is about twice that of the United States. Even in absolute dollar terms, China invests double what the US does. The combination of high R&D spending and massive investment capacity creates a powerful dynamic — innovation funded by research, then scaled into production.
The results are visible in global trade data. Five years ago, China was not a major car exporter. Today, it is the world's largest. In solar energy, China produces about 80% of global output. Electric vehicles, batteries, drones, and telecommunications equipment now compete at the technological frontier.
"China is now passing from being a technological follower to being a technological leader in an increasing number of industries," Ross observes. "It's the first developing economy ever to achieve this."
From technology importer to exporter
A decade ago, China's exports were concentrated in medium-technology products. Today, high-technology goods make up a growing share. More significantly, the direction of technology transfer has begun to reverse.
"We've now got a situation where China is no longer simply an importer of technology; it's an exporter of technology," Ross says. This shift is reshaping how China integrates with the global economy — and how the world perceives the country.
The global implications are substantial. With the US growing at slightly over 2% annually and Europe and Japan around 1%, China's trajectory means it will contribute more to world economic growth than any other major economy — growing more than twice as fast as the US and four times as fast as Europe and Japan.
Pivoting to the Global South
Trade data reveals a striking reorientation. China's exports to the United States have fallen nearly 10% as protectionist measures took effect. But this decline has been more than offset by expanding trade with Global South economies.
"The Global South — if we go back 30 years or 40 years ago — was a sort of political movement," Ross notes. "Now, it is extremely important economically."
India, Indonesia, and Vietnam are all growing at around 5% annually. These economies have no interest in protectionism; globalization has served them well. China is now the largest trading partner for over 120 countries, many of them in the Global South. The US accounts for less than 20% of the world economy and a similar share of global trade, leaving ample room for diversification.
"They want to develop their own economies, and they're able to develop their economies in cooperation with China better than with the United States," Ross observes.
Europe's divergent path
While the US has moved to block Chinese EVs entirely — a 100% ban — Europe has taken a different approach. On energy transition, Europe and China are moving in the same direction: away from fossil fuels and toward renewables.
"The United States under Trump is trying to go in the opposite direction," Ross notes. "Therefore, obviously, this is going to create a whole series of industries in which Europe and China will be able to cooperate, in which the United States won't go."
Germany's position is particularly telling. As a major car exporter, Germany understands that shielding itself from international competition leads to technological decline. "Therefore, they, in a certain sense, need the competition from China. They also want technology transfer from China."
At the start of the 14th Five-Year Plan, it was difficult to name a global industry where China held technological leadership. By the plan's end, such industries clearly existed. Looking to the 15th Five-Year Plan, Ross expects the number to double, driven by the same fundamental macroeconomic factors.
The story of China's economic ascent, in Ross's telling, is no longer about catching up. It's about setting the pace — in technology, in investment, and in redrawing the map of global trade.
Reporter: Guo Zedong
Video capture: Guo Zedong
Video: Qin Shaolong
Cover: Lai Meiya
