Congratulations to China. When all the math’s done and the meat thermometer confirms the books are thoroughly cooked, the world’s second-largest economy will achieve this year’s growth target.

That’s according to the only person whose opinion on this, or anything else to do with matters internal to China, counts: Xi Jinping.

“The growth rate is expected to reach around 5%,” Xi announced while regaling the Party faithful, which is everyone who values their life in China, but in this case refers specifically to the Chinese People’s Political Consultative Conference, a kind of advisory board chaired by Standing Committee member and CCP chief ideologue Wang Huning.

Xi proclaimed 2025 an “extraordinary year.” On that much, there can be no doubt. Whether it was “extraordinary” in the narrow context of the Chinese economy’s debatable, though.

Remember: The 5% growth goal, to the extent China actually did hit the target, is brought to you by deflation, which is to say headline real GDP’s flattered by the deflator.

There’s the chart: The implied deflator spent a 10th quarter in negative territory in Q3. It’s been two and a half years since nominal growth outstripped real growth.

The Party has proven completely inept at rescuing the economy from deflation which by now’s entrenched. Retail sales growth was just 1.3% in November, the slowest since a contraction in December of 2022. Credit demand’s nonexistent. And the “endless” (to use Bloomberg’s adjective) property collapse pushed the last of the country’s major developers, Vanke, to the brink of default this month.

So, I don’t know if “extraordinary” is the right superlative for China economically, but if you’re Xi, you can call it whatever you want. Nobody’s going to argue with you.

China did achieve one major macro milestone in 2025: The trade surplus hit $1 trillion.

As the figure reminds you, that’s a first, and it underscores the quixotic futility of attempting to put the genie back in the lantern a quarter century on from China’s WTO accession.

In the same speech, Xi said China’s “forging ahead under pressure,” and continues to “demonstrate strong resilience and vitality.”

Separately, Xi delivered his annual New Year’s address. I’ll leave you with an excerpt, presented below without further comment.

Greetings to all! Year after year, life opens a fresh chapter. As the new year begins, I extend my best wishes to you from Beijing! The sun of the new year will soon rise. Only a strong Communist Party of China can make our country strong. May our great motherland stand in magnificence! May the fields across the country deliver good harvest! May our nation bathe in the glory of the morning! May you all enjoy life to the fullest, and achieve every success! May all your dreams come true!