{"id":596314,"date":"2026-05-05T00:55:00","date_gmt":"2026-05-05T00:55:00","guid":{"rendered":"https:\/\/buglecall.org\/?p=596314"},"modified":"2026-05-05T00:55:00","modified_gmt":"2026-05-05T00:55:00","slug":"iran-war-threatens-chinas-4-5-percent-growth-target-analysts","status":"publish","type":"post","link":"https:\/\/buglecall.org\/?p=596314","title":{"rendered":"Iran War Threatens China’s 4.5 Percent Growth Target: Analysts"},"content":{"rendered":"

Iran War Threatens China’s 4.5 Percent Growth Target: Analysts<\/span><\/p>\n

\n

Authored by Jarvis Lim via The Epoch Times<\/a> (emphasis ours),<\/em><\/p>\n

China\u2019s already-strained economy faces mounting pressure as the Iran war threatens to choke export growth and suppress domestic demand, putting its 4.5 percent growth target at risk, experts say.<\/strong><\/p>\n

<\/a><\/p>\n

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A woman takes a photo of the Lujiazui financial district across the Huangpu River on the Bund promenade in Shanghai, China, on March 5, 2026. Jade Gao\/AFP via Getty Images<\/em><\/figcaption><\/figure>\n

<\/p>\n

As the U.S.\u2013Israeli war against the Iranian regime stretches past the two-month mark, President Donald Trump said in an April 29 interview with Axios that he will continue to maintain a blockade<\/a> of Iran until Tehran agrees to a deal addressing concerns over its nuclear program.<\/p>\n

Brent crude, the global oil benchmark, briefly spiked to over $120 a barrel after Trump\u2019s remarks, <\/strong>hitting a four-year high before dropping back to $114. It now sits at around $108 as of Sunday afternoon.<\/p>\n

Rising oil costs have also driven up plastic prices across Southern China, squeezing profit margins and triggering panic buying throughout the supply chain at Dongguan\u2019s Zhangmutou\u2014the nation\u2019s top plastics trading hub.<\/p>\n

China is the world\u2019s largest producer, consumer, and exporter of final plastic products, according to a 2025 report from the Organisation for Economic Co-operation and Development, an intergovernmental organization.<\/p>\n

Export Squeeze\u00a0<\/strong><\/h2>\n

Tsai Ming-fang, a professor of industrial economics at Tamkang University in Taiwan, said that while many argue China\u2019s strategic oil inventories would shield it from the effects of a blockade, the turmoil in China\u2019s plastics markets shows the conflict is already weighing on its manufacturing exports.<\/p>\n

China is estimated to be holding the world\u2019s largest crude stockpiles, at nearly 1.4 billion barrels as of December 2025 and growing in 2026, according to an analysis released in April by the U.S. Energy Information Administration.<\/p>\n

\u201cSurging energy prices in financially unstable countries like Indonesia, Thailand, and Vietnam are squeezing out discretionary spending, dragging down China\u2019s export shipments,<\/strong>\u201d Tsai told The Epoch Times.<\/p>\n

\u201cIf consumers don\u2019t consider these Chinese goods necessities, China\u2019s shipment volumes will naturally fall further.\u201d<\/p>\n

<\/a><\/p>\n

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Containers at the Longtan port in Nanjing, eastern China’s Jiangsu province on Jan. 14, 2026. AFP via Getty Images<\/em><\/figcaption><\/figure>\n

<\/p>\n

Indonesia, Thailand, and Vietnam are members of the Association of Southeast Asian Nations (ASEAN)\u2014China\u2019s largest trading partner\u2014with bilateral trade reaching 6.82 trillion yuan ($999 billion) in the first 11 months of 2025.<\/p>\n

Chinese exports to the bloc totaled 4.29 trillion yuan ($628 billion) over the same period, up 14.6 percent year on year, data from the Economic and Commercial Office of the Mission of the People\u2019s Republic of China to ASEAN showed.<\/p>\n

Echoing the concern, Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis Research, said China\u2019s export engine is now caught in a \u201cdouble bind,<\/strong>\u201d with higher shipping costs driven by Hormuz disruptions and softening end-markets across Southeast Asia.<\/p>\n

\u201cThis is not yet a cliff edge, but the directional pressure [on China\u2019s exports] is clearly downward, particularly in electronics, machinery, and mid-tier consumer goods,\u201d Garcia-Herrero told The Epoch Times.<\/p>\n

Liu Meng-chun, director of the Chung-Hua Institution of Economic Research\u2019s mainland China division in Taipei, said war-driven inflation in advanced economies like the United States and Europe is eroding purchasing power, stifling demand for Chinese goods and compounding the country\u2019s chronic overcapacity<\/a>.<\/p>\n

\u201cThe European Union overtook the United States as China\u2019s second-largest export destination in 2025, but the conflict has stoked price pressures across the region, eating into the profit margins of Chinese firms,\u201d Liu told The Epoch Times.<\/p>\n

Exports from the world\u2019s second-largest economy grew just 2.5 percent year on year in March, a sharp pullback from the 21.8 percent expansion recorded in January and February, according to China\u2019s General Administration of Customs.<\/p>\n

Faltering Demand<\/strong><\/h2>\n

On the consumer front, Chinese car sales\u2014widely viewed as a barometer of domestic demand\u2014are declining.<\/p>\n

Passenger vehicle retail sales in China fell 15 percent year on year in March to 1.648 million units, according to the China Passenger Car Association.<\/p>\n

Cumulative sales in the first quarter of 2026 reached 4.226 million units, down 17.4 percent from a year prior.<\/p>\n

\u201cThe prolonged stalemate in the Middle East crisis has driven international oil prices sharply higher … suppressing the release of consumer potential<\/strong>,\u201d the industry body said.<\/p>\n

<\/a><\/p>\n

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A receptionist sits near the Leapmotor T03 model displayed at a showroom in Hangzhou in eastern China’s Zhejiang province on Tuesday, May 14, 2024. Caroline Chen\/AP Photo<\/em><\/figcaption><\/figure>\n

<\/p>\n

Garcia-Herrero noted that China\u2019s domestic demand was already under strain before the Iran war, warning that the ongoing energy shock will only exacerbate the decline.<\/p>\n

\u201cElevated oil prices are feeding directly into transport and manufacturing input costs, squeezing household purchasing power and eroding consumer confidence,\u201d she said.<\/p>\n

China\u2019s consumer price index, a key gauge of inflation, rose 1 percent year-on-year in March and was down 0.3 percentage points from February, according to China\u2019s National Bureau of Statistics.<\/p>\n

The producer price index (PPI)\u2014a measure of costs at the factory gate\u2014climbed 0.5 percent in March from a year earlier, reversing a 0.9 percent decline in February and marking its first rise after 41 consecutive months of contraction.<\/p>\n

But Tsai cautioned against interpreting China\u2019s PPI increase as a sign of economic recovery.<\/p>\n

\u201cThe PPI rebound stems from energy cost pass-throughs driven by the conflict, rather than any genuine pickup in domestic spending<\/strong>,\u201d Tsai said.<\/p>\n

\u201cThe latest data indicates China is likely still grappling with internal \u2018involution.\u2019\u201d<\/p>\n

\u201cInvolution\u201d describes a cycle in which Chinese firms compete ever more fiercely for a shrinking pool of consumers, driving down prices and profits without generating real economic growth.<\/p>\n

As the fighting in Iran persists, the erosion of both domestic spending and export growth will inevitably deal a severe blow to China\u2019s job market, according to Liu.<\/p>\n

\u201cThe export sector has traditionally offered massive employment opportunities, but sluggish foreign trade is now constraining wage growth<\/strong>,\u201d Liu said.<\/p>\n

\u201cUnder these circumstances, the unemployment rate could rise further, hidden unemployment will become more pronounced, and the labor market will continue to contract.\u201d<\/p>\n

According to data released by China\u2019s National Bureau of Statistics on April 21, the unemployment rate for those aged 16 to 24, excluding students, rose to 16.9 percent in March, up from 16.1 percent in February.<\/p>\n

Dimming Outlook\u00a0\u00a0<\/strong><\/h2>\n

In March, China\u2019s State Council announced an economic growth target of 4.5 to 5 percent for 2026, its lowest since the early 1990s, not including the pandemic.<\/p>\n

<\/a><\/p>\n

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Construction workers leave a building site for a new office tower in the Central Business District in Beijing on April 3, 2025. Kevin Frayer\/Getty Images<\/em><\/figcaption><\/figure>\n

<\/p>\n

Tsai said Beijing\u2019s decision to lower its growth target reflects its own lack of confidence in the economy, and the protracted conflict in the Middle East has only darkened the outlook further.<\/p>\n

\u201cUnless China\u2019s major trading partners\u2014including Africa, Southeast Asia, and the EU\u2014dramatically scale up imports, hitting Beijing\u2019s growth target looks increasingly unlikely,\u201d Tsai said.<\/p>\n

\u201cBesides, new legislation from the EU is piling further pressure on China\u2019s economy.\u201d<\/p>\n

The European Commission unveiled the Industrial Accelerator Act on March 4, imposing strict screening on foreign investments exceeding 100 million euros ($117 million) in sectors that account for more than 40 percent of global capacity, such as electric vehicles, batteries, solar energy, and critical raw materials.<\/p>\n

The move\u2014widely viewed by analysts as targeting China\u2014drew a sharp rebuke from Beijing, which claimed the framework was \u201cdiscriminatory,\u201d and constituted \u201csevere investment barriers.\u201d<\/strong><\/p>\n

Echoing Tsai\u2019s assessment, Garcia-Herrero said hitting 4.5 percent growth remains \u201cachievable on paper,\u201d but the margin for error has narrowed considerably.<\/p>\n

\u201cBeijing retains meaningful policy tools\u2014fiscal stimulus, targeted monetary easing, and strategic energy reserves,\u201d Garcia-Herrero said.<\/p>\n

\u201cBut deploying them effectively against an externally driven inflation shock is a different challenge than managing domestic cycles.\u201d<\/p>\n

Garcia-Herrero predicted that if the Hormuz blockade extends beyond the second quarter, a revision toward 3.8 to 4.2 percent looks \u201cincreasingly likely.\u201d<\/p>\n

\u201cThe 4.5 percent target now depends heavily on a conflict resolution timeline that China cannot control,\u201d she said.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 05\/04\/2026 – 20:55<\/span><\/p>","protected":false},"excerpt":{"rendered":"

Iran War Threatens China’s 4.5 Percent Growth Target: Analysts Authored by Jarvis Lim via The Epoch Times (emphasis ours), China\u2019s already-strained economy faces mounting pressure as the Iran war threatens to choke export growth and suppress domestic demand, putting its 4.5 percent growth target at risk, experts say. A woman takes a photo of the… Continue reading Iran War Threatens China’s 4.5 Percent Growth Target: Analysts<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":596315,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[17,22,13],"tags":[],"class_list":["post-596314","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-border-security","category-immigration","category-immigration-reform","entry"],"_links":{"self":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/596314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=596314"}],"version-history":[{"count":0,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/596314\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/media\/596315"}],"wp:attachment":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=596314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=596314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=596314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}