ING sets out 10 key questions for China’s economy in 2027

Investing.com -- China’s economy is expected to grow 4.5% in 2027, with technology and exports supporting activity as weak domestic demand and property-sector troubles persist, according to ING.

In a November 11 report, ING Greater China Chief Economist Lynn Song identified 10 questions shaping the country’s economic outlook, including growth targets, trade tensions, inflation, monetary policy and artificial intelligence.

ING expects Beijing to lower its annual GDP growth target to around 4.5%, compared with the 4.5%-5% range established for 2026.

Exports should maintain high-single-digit growth, supported by technology demand, although renewed trade tensions with the U.S. and European Union remain risks.

Domestic consumption presents a bigger challenge. Retail sales increased just 1.1% during the first three quarters of 2026, reflecting weak confidence and subdued wage growth.

ING anticipates a modest consumption recovery in 2027, alongside consumer inflation rising to 1.1%.

China’s property downturn could become less severe, but elevated inventories and weak investment are expected to remain obstacles.

On policy, ING forecasts a fiscal deficit target near 4% of GDP and a 10-basis-point interest rate cut from the People’s Bank of China.

The bank expects the yuan to appreciate further, projecting USD/CNY at 6.50 by year-end, with greater exchange-rate volatility.

Chinese government bonds face potential selling pressure as investor sentiment improves. ING forecasts the 10-year sovereign yield reaching 1.9%.

Artificial intelligence remains another major question. Technology investment has supported manufacturing and exports, but automation could weaken entry-level employment opportunities.

ING also examined China’s longer-term economic transition, highlighting progress in advanced manufacturing, renewable energy and digitalization.

The bank warned that these gains have not translated into comparable improvements in household consumption.

Strengthening domestic demand will be particularly important as China’s growing trade surplus attracts greater scrutiny from international trading partners.