China has set its lowest economic growth target in decades, signalling a cautious approach as the world’s second-largest economy confronts mounting domestic and global challenges. During the annual meeting of the country’s legislature in Beijing, Chinese Premier Li Qiang announced that the government aims for gross domestic product (GDP) growth of between 4.5% and 5% in 2026, marking the first time since the early 1990s that the official target has fallen below the 5% threshold.
The announcement was made during the opening session of the National People’s Congress, the country’s top legislative body, where thousands of delegates gathered to review economic priorities and policy plans for the coming year. The lower growth target reflects Beijing’s acknowledgement that the economic environment has become increasingly complex, shaped by slowing domestic demand, geopolitical tensions and structural issues within the Chinese economy.
Officials emphasised that the focus is shifting from rapid expansion toward what they described as “high-quality growth.” The government believes that maintaining steady but more sustainable growth will help strengthen the country’s economic resilience in the long run. The new target also signals a strategic shift away from the export-driven development model that fuelled China’s rapid rise over previous decades. Instead, policymakers are increasingly prioritising innovation, technological development and domestic consumption as the key engines of future economic progress.
Alongside the growth target, authorities outlined several key economic goals for the coming year. The government aims to create more than 12 million urban jobs and maintain the urban unemployment rate at around 5.5%. These measures are intended to stabilise the labour market and ensure that economic moderation does not translate into widespread job losses.
China’s leadership is also preparing to roll out its 15th Five-Year Plan (2026–2030), which will guide economic development over the next five years. The draft blueprint highlights efforts to strengthen domestic consumption, expand advanced manufacturing and invest heavily in innovation and technology sectors. The plan is expected to serve as a roadmap for navigating the next phase of China’s economic transformation.
Despite the strategic pivot, the Chinese economy continues to face significant headwinds. Weak consumer spending, a prolonged property sector downturn and an ageing population have all weighed on growth prospects. The property market crisis in particular has reduced revenues for local governments and dampened investor confidence, posing a long-term challenge for policymakers attempting to rebalance the economy.
Global uncertainties are also influencing China’s economic outlook. Tensions with major trading partners, shifting supply chains and geopolitical conflicts have added further unpredictability to international markets. In response, Beijing has sought to maintain fiscal discipline while leaving room for targeted policy measures if conditions worsen. Analysts say the slightly lower growth target provides the government with greater flexibility to manage economic risks while continuing structural reforms.
At the same time, China plans to increase defence spending by about 7%, reflecting ongoing efforts to modernise its military even as economic growth slows. Environmental commitments have also been a subject of debate, with the government outlining goals to reduce carbon intensity while balancing development needs.
Economists view the new growth target as a recognition that China is entering a different phase of economic development. Rather than pursuing the rapid expansion that characterised previous decades, the leadership appears increasingly focused on stability, technological advancement and long-term sustainability as it navigates a more uncertain global economic landscape.
