China’s Economy is Forecast to Grow Faster Than Expected in 2026 – Goldman Sachs

Report on China’s Economic Strategy and Alignment with Sustainable Development Goals (2026-2030)

Industrial Modernization, Innovation, and Clean Energy (SDG 9, SDG 7, SDG 12)

Analysis of China’s 15th Five-Year Plan (2026-2030) proposal reveals a strategic focus on advancing several Sustainable Development Goals. The plan prioritizes resilient infrastructure, inclusive and sustainable industrialization, and fostering innovation, directly aligning with the objectives of SDG 9.

• Upgrades to Traditional Industries: The plan mandates the modernization of sectors such as metals, chemicals, and textiles. This initiative supports the transition towards more sustainable patterns of consumption and production (SDG 12).
• Growth in Emerging Industries: Significant emphasis is placed on the expansion of high-tech sectors, particularly new energy. This commitment is central to ensuring access to affordable, reliable, sustainable, and modern energy for all (SDG 7).
• Comprehensive Government Support: The industrial goals are backed by broad-based government support, encompassing logistics and financing, to enhance technological self-reliance and global manufacturing competitiveness.

Decent Work and Sustainable Economic Growth (SDG 8)

The economic targets outlined in the Five-Year Plan proposal aim to promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all, in line with SDG 8.

1. GDP Growth Target: The leadership’s goal for per capita GDP to reach the level of a moderately developed country by 2035 implies a projected real annual GDP growth rate of approximately 4.5% to 5% for the 2026-2030 period.
2. Boosting Domestic Consumption: A key policy objective is to raise the domestic consumption rate by promoting income growth that is commensurate with overall economic growth.
3. Monetary and Fiscal Policy: Forecasts indicate supportive economic policies, including interest rate cuts and fiscal expansion, to stimulate credit growth and accelerate progress toward these economic goals.

Global Partnerships for Sustainable Development (SDG 17)

Recent developments in international trade relations, specifically between the U.S. and China, reflect the complex dynamics of global partnerships for sustainable development as outlined in SDG 17.

• Trade Truce Agreement: A meeting between U.S. and Chinese leadership resulted in a truce on trade tariffs, demonstrating a step towards revitalizing global partnerships.
• Negotiating Levers: China’s strategic control over rare earth minerals has been identified as an effective negotiating tool, influencing the reduction of U.S. tariffs and export controls.
• Future Trade Barriers: This strategic positioning is expected to limit the ability of other nations to impose significant trade barriers, reinforcing China’s role as an equal partner in global trade negotiations.

Sustainable Cities and Communities (SDG 11)

The outlook for China’s property market is a critical factor in its progress towards making cities and human settlements inclusive, safe, resilient, and sustainable, as targeted by SDG 11.

• Housing Market Downturn: The property market downturn, which began in 2021, is projected to continue into 2026.
• Diminishing Economic Drag: Despite the prolonged downturn, the negative impact on overall GDP growth is expected to shrink. This is due to a significant reduction in real estate’s share of the economy, with new housing starts down 75% and property investment down 50% from their peak.
• Path to Stabilization: While housing inventories remain high, the reduced scale of the property sector means its continued contraction will have a smaller impact on the national economy, contributing to greater economic stability necessary for sustainable urban development.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy – The article mentions China’s new Five-Year Plan, which includes a focus on “growth in emerging industries such as new energy.”
• SDG 8: Decent Work and Economic Growth – The article extensively discusses China’s economic growth targets, including the goal for “per capita GDP [to] reach that of a moderately developed country by 2035” and maintaining a “real annual GDP growth rate of about 4.5%.”
• SDG 9: Industry, Innovation, and Infrastructure – A central theme is China’s focus on its industrial system, with the Five-Year Plan calling for “upgrades to traditional industries” and prioritizing “technology self-reliance” and becoming “more competitive in manufacturing.”
• SDG 17: Partnerships for the Goals – The article details the trade relationship and negotiations between the US and China, including a “truce on trade,” agreements on tariffs, and export controls, which relates to global trade partnerships.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. This is connected to the Five-Year Plan’s goal to foster “growth in emerging industries such as new energy.”
• Target 8.1: Sustain per capita economic growth in accordance with national circumstances. The article directly addresses this by citing China’s goal to see “per capita GDP reach that of a moderately developed country by 2035” and maintaining a “real annual GDP growth rate of about 4.5%.”
• Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product. This is supported by the article’s emphasis on China’s plan for “upgrades to traditional industries,” “technology self-reliance,” and the top priority to “double down on the industrial system.”
• Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system. The discussion of the US-China trade truce, the agreement for the “US to reduce other tariffs,” and China’s postponement of “rare-earth export controls” are all actions that directly impact the multilateral trading system.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for Target 7.2: The article implies an indicator through the stated goal of “growth in emerging industries such as new energy.” Progress would be measured by the rate of growth and investment in this sector.
• Indicator for Target 8.1: The article explicitly mentions two indicators: the “real annual GDP growth rate” (forecasted at 4.5%) and the level of “per capita GDP,” with the goal of reaching that of a “moderately developed country by 2035.”
• Indicator for Target 9.2: An implied indicator is the global market share of China’s manufacturing sector. The article states a key objective is “to outcompete global peers, gaining global market share.” The growth of “high-tech manufacturing” is another measurable indicator.
• Indicator for Target 17.10: The article provides specific indicators related to trade policy. These include the “reduction of other tariffs by 10 percentage points” by the US and the loosening of “some export controls,” which are quantifiable measures of trade barrier reduction.

SDGs, Targets, and Indicators Table

Source: goldmansachs.com