The Chinese government is aiming to grow the country’s gross domestic product (GDP) in 2026 by between 4.5 and 5 percent, making it the first time since 1991 that the national target has dipped below 5 percent, according to multiple media outlets.
The downgraded target was officially shared by Chinese Premier Li Qiang during his delivery of the government work report at the opening of the fourth session of the 14th National People’s Congress in Beijing this morning.
It marks a break from the GDP target of around 5 percent that has been set in recent years, with the figures hitting 6 percent in 2021 and 5.5 percent in 2022.
According to analysts, the current announcement suggests the central government has accepted slower growth, as China deals with a host of economic issues, including low birth rates, an ageing society, a weak property market, sluggish domestic demand and trade tensions with the US.
Bloomberg notes the modest GDP growth will allow the government to move towards more sustainable ways to grow the economy, away from property and infrastructure projects that incur debt. At the same time, a less ambitious GDP target will ensure that officials feel less inclined to make use of large stimulus packages amid world trade instability and disruptions.
“The growth target is quite realistic,” Economist Intelligence Unit senior economist, Xu Tianchen, told CNBC. “It’s a further shift from a ‘number-first’ mindset towards a ‘quality-first one.”
Meanwhile, Standard Chartered economist Carol Liao said to the Financial Times the 4.5 to 5 percent target was in keeping with China’s “long-term objective of reaching mid-level developed-economy income by 2035.”
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Aside from GDP, the work report delivered by Li also sets 2026 targets for other economic indicators. These include 12 million new urban jobs, a surveyed urban unemployment rate of roughly 5 percent, a consumer price index growth of approximately 2 percent, and grain production reaching around 700 million tonnes.
Concurrently, the central government has carried over the 2025 budget deficit rate of roughly 4 percent of GDP into 2026, and is planning to increase its deficit this year by an additional 230 billion yuan to 5.89 trillion yuan. Meanwhile, it is also looking to cut carbon emissions by around 3.8 percent per unit of GDP.
Li also mentioned that China’s new 15th Five-Year Plan, from 2026 to 2030, sets out 20 key targets. They include doubling the country’s average GDP per capita from its 2020 figure by 2035, setting the foundations needed for China to become a moderately-developed country.
As part of the new Five-Year Plan, 109 major construction projects across six areas are scheduled to launch, covering areas such as production, social welfare services and ecological protection.
Reference to the Greater Bay Area (GBA) was made in Li’s speech, with the premier stating the government was looking to develop the region, along with the Beijing-Tianjin-Hebei Region and the Yangtze Delta, into world-class metropolitan clusters.
The National People’s Congress (NPC) is one half of a wider annual political gathering known as the Two Sessions, with the other meeting being the Chinese People’s Political Consultative Conference (CPPCC). The fourth session of the 14th NPC will run until 12 March, while the fourth session of the 14th CPPCC will conclude on 11 March.
