We are pleased to republish the below article by the distinguished Marxist economist Michael Roberts, which looks at the reality of the Chinese economy and its prospects in the context of the adoption in March of the 15th Five-Year Plan, by the country’s highest legislative body, the National People’s Congress (NPC).
Adopting the Marxist standpoint of seeking truth from facts in his economic analysis, Michael deals with a number of erroneous claims often made regarding the Chinese economy in a rigorous but comprehensible fashion, which also does not shy away from some of the very real challenges it faces.
He sees the economic growth target set for this year of around 4.5-5% as being well justified and goes on to explain:
“In 2025, China’s real GDP growth was 5%, a rate among the major economies of the world only surpassed by India (which exaggerates its GDP data) and more than twice the US growth rate and three times that of the rest of the top G7 capitalist economies.
“Since 2020, the government has set a target for China to become a ‘mid-level’ economy, (as defined by the World Bank at $20,000 per person at 2020 prices) by 2035. That meant effectively doubling its per capita GDP over those 15 years. It is clearly on target to do that as China’s per capita income would need to grow only at an average annual rate of about 4.17% a year from hereon. Assuming China averages an annual real per capita GDP growth rate from hereon of about 4.5%, then it will surpass the World Bank definition by 2034.”
Making an important comparison, he further notes: “China’s per capita GDP would still be only 27% of that of the US (assuming the US per capita GDP grows at a 1.5% average rate from here). In contrast, India’s per capita GDP would be only 5% of the US by 2035.”
He then proceeds to deal with the fact that: “China’s GDP and growth rates are continually dismissed by many mainstream Western economists as well as by some on the heterodox left,” but points out:
“Recently the prestigious Penn World Tables have confirmed that they consider China’s growth data as broadly accurate and no longer attempt to ‘adjust’ it downwards… Yes, corporate debt is high, and the property market is still falling. But nearly all this debt is financed entirely from domestic savings, unlike many examples of rapid credit expansion elsewhere. So, this debt is perfectly manageable.”
He also deals with the balance and relationship between investment and consumption, another issue on which a measure of confusion abounds:
“China’s household consumption is not stagnating, it’s growing 4.4%, more or less in line with GDP growth. Exports are not driving growth. Net trade accounted for about 20% of 2025 growth, the rest was driven by domestic consumption and investment.”
Continue reading The 15th Five-Year Plan and China’s economic outlook