China has set its target for GDP growth to a record low of 4.5%-5%, reflecting an economic strategy that is shifting away from export-led growth to a model focused on high-quality growth driven by technology and structural reform. Premier Li Qiang announced the target during the opening session of the National People's Congress (NPC), China's annual parliamentary gathering.
Key Takeaways
China has set its GDP growth target for 2026 between 4.5% and 5%, the lowest in decades, reflecting a shift towards high-quality growth driven by technology and structural reform rather than exports. The announcement was made during the National People's Congress (NPC), where Premier Li Qiang also outlined plans to boost domestic consumption, enhance innovation, and address economic challenges such as an aging population and property sector issues.
- China sets GDP growth target at 4.5%-5% for 2026, the lowest since 1991
- Shift towards high-quality growth focused on hi-tech industries and structural reform
- Plans to boost domestic consumption and innovation outlined in the government work report
- Economic challenges include an aging population, property sector issues, and weak domestic demand
Addressing nearly 3,000 delegates in Beijing, Li described 2025 as a year with profound developments both at home and abroad. The NPC also published a draft of the 15th five-year plan, outlining economic strategies for 2026-2030, which includes chapters on boosting consumption and enhancing innovation.
The low GDP target reflects China's shift towards high-quality growth built on hi-tech industries rather than traditional drivers like construction and exports. The country faces downward pressures such as an aging population, ailing property sector, weak domestic demand, and global trade tensions.
China also published its 2026 budget, which includes a 7% increase in defense spending, slightly lower than previous years. The economic plans reiterated the goal of boosting domestic demand but provided limited details on how this would be achieved.
The five-year plan calls for a 17% cut in carbon intensity by 2030, aiming to reduce CO2 emissions per unit of economic activity. However, climate experts note that this target may fall short of China's pledge to reduce carbon intensity by more than 65% from 2005 levels by the end of the decade.
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