China’s Xi tolerates relatively slow growth in richest province

[BEIJING] President Xi Jinping indicated that the relatively lacklustre expansion of China’s richest province is acceptable, in the latest sign that senior leaders of the world’s second-largest economy are tolerating slower growth.

When Guangdong officials told Xi that the largest provincial economy only expanded 4.1 per cent in the first nine months of 2025, below the national average of 5.2 per cent but better than its pace last year, Xi suggested he was okay with it.

“Your total economic output remains firmly in first place nationwide. At such a large scale, the current growth rate still represents a significant increase,” Xi said, according to a report by the official Xinhua News Agency. “Guangdong should compare with itself. It’s important to focus on researching and addressing new issues in economic and social development.”

Xi’s remarks add to recent signals making clear Beijing wants at least 4 per cent growth in the coming years, slower than the current rate as the country fights deflationary pressure and focuses on boosting demand and consumption. He spoke during a trip to the provinces of Hainan and Guangdong last week.

Premier Li Qiang said last week that the country’s gross domestic product is expected to surpass 170 trillion yuan (S$31.07 trillion) in five years. That implies an average annual growth rate of about 4 per cent through 2030 without adjusting for price changes.

Separately, an official guidebook published by the ruling Communist Party said the country’s economy needs to maintain an average annual growth rate of 4.17 per cent over the next decade to stay on track with its goal of doubling per capita GDP between 2020 and 2035.

SEE ALSO

China tightens rules for state-owned firms to add foreign debt

China is on track to achieve its real GDP growth goal of about 5 per cent this year, but nominal expansion has been slower due to falling prices.

Guangdong is China’s largest provincial economy, accounting for about 10 per cent of the national GDP last year. But its growth has lagged the national pace in the past few years, taking a greater hit from the property sector’s collapse as well as trade tensions and weak consumer confidence.

Fixed-asset investment in Guangdong plunged 14 per cent in the first three quarters of this year from a year earlier, according to official data. That was much worse than the national reading of a 0.5 per cent decline and likely reflected cautious business decisions in the face of tariff uncertainties. Despite the rollout of government subsidies, investment in equipment only expanded 1.7%. BLOOMBERG