Goldman Sachs Forecasts 4.8% China GDP Growth in 2026 Driven by Strong Exports

Goldman Sachs Projects Above-Consensus China GDP Growth

Goldman Sachs Research anticipates that China's real Gross Domestic Product (GDP) will grow by 4.8% in 2026, a figure that stands above the consensus estimate of 4.5% from other economists. This projection, detailed in recent reports, suggests a resilient economic outlook for China, primarily fueled by its strong export sector.

Surging Exports as Key Growth Driver

The forecast underscores the significant role of exports in driving China's economic momentum. Goldman Sachs economists, including Hui Shan, Chief China Economist for Goldman Sachs Research, point to several factors contributing to this export strength:

• Diversification of Markets: Chinese exporters have successfully expanded into non-U.S. markets, particularly emerging market economies, compensating for declines in traditional trading partners.
• Increased Competitiveness: Falling export prices are making Chinese products more competitive globally.
• High-Tech Exports: There is an expected growth in high-tech exports, aligning with China's focus on advanced manufacturing and innovation.
• Current Account Surplus: Goldman Sachs Research expects China's current account surplus to rise to 4.2% of GDP in 2026, up from 3.6% in 2025, reflecting strong goods exports and subdued imports.

Real export growth is now expected to be between 5-6% annually for the next few years, a significant increase from a previous forecast of 2-3%.

Navigating Domestic Economic Headwinds

Despite the optimistic export outlook, Goldman Sachs acknowledges persistent domestic economic challenges within China. These include:

• Low Household Consumption: Building a consumption- and services-driven economy is expected to take years.
• Labor Market Weakness: Structural factors, such as job displacement due to artificial intelligence, and cyclical challenges from the property downturn contribute to a weak labor market.
• Property Market Downturn: While the housing market's decline has not yet bottomed out, the economic drag from this sector is anticipated to lessen. New housing starts are significantly below peak levels, and property investment has decreased.
• Investment Slowdown: Constraints on local government financing and 'anti-involution' actions targeting overcapacity have led to a slowdown in investment growth.

Policymakers face the challenge of finding new sources of growth, moving away from a reliance on property and infrastructure. The government's commitment to 'stabilizing investment' in 2026 is expected to see the growth rate of gross fixed capital formation rebound.

Conclusion

Goldman Sachs' forecast for China's GDP growth in 2026 reflects a nuanced view of the country's economic trajectory. While a robust export sector is poised to be a primary engine of growth, the nation continues to grapple with internal economic pressures. The ability to manage these domestic challenges while capitalizing on export opportunities will be crucial for China to achieve the projected growth rate.