The Organization for Economic Cooperation and Development (OECD) raised China's GDP forecast for 2025 to 5%, up by 0.1 percentage point compared with its previous projection in September. The upgrade by the OECD and other foreign institutions conveyed positive expectations for the world's second-largest economy amid robust policy support and strong resilience, experts said. The OECD highlighted China's annual growth of 5.2% year-on-year in the first three quarters of 2025. Consumption has been supported by the expansion of trade-in programs, including cars and home electronics, according to the latest OECD Economic Outlook. China's fiscal policy has been expansionary in 2025 with the introduction of measures to support incomes and boost consumption, in addition to the trade-in programs, it said.
In addition to the OECD, multiple foreign institutions, including Standard Chartered and Goldman Sachs, have raised their projections for China's economic growth rates and expressed optimism about Chinese assets. Standard Chartered raised its forecast for China's 2026 GDP growth to 4.6% from 4.3%, supported by the country's gains in total factor productivity (TFP) and resilient exports. “We expect exports to stay resilient and policy to continue to support domestic demand, especially consumption,” analysts wrote. China's TFP gains should continue to fuel growth, aided by rapid artificial intelligence (AI) adoption. Meanwhile, Goldman Sachs has upgraded its forecast for China's 2025 real GDP growth from 4.9% to 5.0%, with even bigger increases in the forecasts for the next two years, expecting that stronger exports will drive overall economic expansion. Goldman Sachs Research increased its real GDP forecast for 2026 from 4.3% to 4.8%, and for 2027 from 4.0% to 4.7%.
Thanks to the increase in China's nominal GDP growth rate and accelerated growth in enterprises' revenue, along with a profit margin recovery driven by support policies and the anti-involution campaign, the earnings growth rate of the entire A-share market in 2026 is expected to rise further from 6% to 8%, Meng Lei, China Equity Strategist at UBS Securities, said in a note. The latest macro-data also showed that China's economy maintains its positive growth trajectory. The purchasing managers' index (PMI) for China's manufacturing sector stood at 49.2 in November, up 0.2 from a month earlier, indicating improvement in manufacturing activity, according to the National Bureau of Statistics (NBS). Next year marks the start of the 15th Five Year Plan period, with the GDP expected to maintain a stable growth rate, so as to lay the foundation for China's per capita GDP in 2035 to effectively double its 2020 level at constant prices, the Global Times reports.
