Why China resists rebalancing its growth model?
中文标题
中国为何抵制增长模式再平衡？
Core conclusion · Tlines extraction
China's growth slowed to 4.6% y/y across the first three quarters of 2026 while exports and external surpluses reached records, widening its internal and external imbalances. BNP Paribas argues Beijing resists rebalancing because exports sustain growth, assert technological power and are a deliberate political and fiscal choice; a negotiated Plaza-style adjustment is unlikely, leaving only gradual, long-term correction once costs outweigh strategic gains.
- Institution
- BNP Paribas
- Published
- 10/26/2026
- Research topic
- US Dollar (DXY)
- Time horizon
- 2026 · September 2026 · this year · H1 2025
Key arguments
- Exports, not domestic demand, drive growth: net exports may contribute about one third of 2026 real GDP growth, while property, investment and retail remain weak.
- Beijing's 15th Five-Year Plan prioritises innovation, high-tech sectors and self-reliance, keeping social security and consumption reform on the back burner.
- Competitiveness is underpinned by cheap production costs, subsidies (about 4% of GDP per the IMF) and an undervalued real effective exchange rate.
- A negotiated adjustment is unlikely; gradual correction requires higher savings abroad and, in China, more outbound investment before structural reforms.
Key numbers
- Real GDP growth, first three quarters 2026
- 4.6% y/y (5.0% in 2025)
- Trade surplus, 12 months to September 2026
- USD 1,249bn (3x 2019 level)
- Current account surplus 2026 forecast
- ~USD 800bn (~4% of GDP; 0.6% of global GDP)
- Goods export growth, first nine months 2026
- 21.9% y/y in USD (5.2% in 2025)
- IMF REER undervaluation estimate, end-2025
- 12%-20%
Main risks
- Trading-partner intolerance: the US and EU absorbed 24% and 28% of China's surplus over the past year; the US-China truce ends in 2027.
- Domestic strain: 30% of industrial firms report losses (26% in 2022), with payment delays and pressure on financial institutions.
- Fiscal constraint: local governments are strained, limiting room for social spending reform.
Corresponding source evidence
Exports continue to be the main driver of growth (their net contribution is expected to account for around a third of real GDP growth in 2026, as it did in 2024–2025).
· 2026Against a backdrop of rebound in global trade, Chinese companies maintained their market share at 14.6% of total exports (measured in US dollars) in the first half of 2026, as they had in 2025.
· 2026Nevertheless, it has still reached a record high: USD1,249 billion over the twelve months to September 2026, which is three times its 2019 level (see Chart 2).
· September 2026
Context: the conclusion is Tlines' automated extraction, not the institution's wording. Quoted evidence is publisher wording. Scope and date must travel with the conclusion.
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AI analysis
How this page was produced
Tlines extracted the conclusion, arguments, numbers and risks above from the report published by BNP Paribas on 10/26/2026, then structured them for comparison. The publisher's own wording is reachable through the source link on this page and is displayed in full above. Last updated 10/26/2026. Methodology · Source policy · AI usage · Request a correction