China Sets 4.5–5% GDP Growth Target for 2026

China has set its 2026 economic growth target at 4.5 to 5 percent, described as a scientifically derived range based on rigorous calculations and risk assessments. The target was announced during the annual National People’s Congress (NPC) and the broader “Two Sessions” political meetings in Beijing.

According to AFP research, this is China’s lowest growth target since 1991, excluding 2020 when no target was set due to the Covid-19 pandemic. Officials present the range as both a floor for growth and a buffer that leaves room for policy discretion amid uncertainty.

Chinese commentary frames the growth target as combining “progress” and “stability,” stressing that its essence is guidance rather than prediction. Authorities link the chosen range to the need to keep growth “within a reasonable range” to support employment, education funding and social security.

This year marks the start of the 15th Five-Year Plan period. To meet a 2035 objective of substantially raising per capita GDP to mid-level developed country standards, an average growth rate of about 4.17 percent is seen as necessary over the next decade. The 4.5–5 percent goal is set above that level, signaling an intention to drive longer-term progress.

Officials also argue that setting the target too low would fail to mobilize initiative or align with medium- and long-term plans, while an unrealistically high figure could encourage short-termism and fear of difficulty amid what they call “changes unseen in a century.”

Policymakers and analysts emphasize that the priority has shifted from the speed of expansion to the quality of growth. The government highlights technological innovation, green transformation and more resilient industrial and supply chains as core objectives.

China points to the global success of its “new three” industries – new-energy vehicles, lithium-ion batteries and photovoltaic products – and advances in areas such as 5G, artificial intelligence and quantum computing. These sectors are portrayed as evidence of “new quality productive forces” reshaping productivity boundaries.

The number of AI companies in China has surpassed 6,000, with the core AI industry scale exceeding one trillion yuan within a few years. Authorities present this as proof of the country’s vitality as a global innovation hub and a key source of future growth.

Premier Li Qiang described the achievements of the past year as “hard-won,” citing a “grave and complex landscape” where external shocks were intertwined with domestic difficulties and tough policy choices. Structural imbalances, sluggish consumption and a weak property market are identified as pressing challenges.

China remains the world’s second-largest economy and accounts for around one-third of global growth, but faces US trade pressures even as strong exports helped deliver 5 percent growth in 2025 and a record trade surplus of $1.2 trillion. Policymakers stress the ongoing need to shift away from traditional drivers such as exports and manufacturing toward consumption.

Despite lowering the target range, Chinese officials and state-linked commentary present the new goal as a sign of strategic resolve, arguing that staying focused on reform, innovation and risk prevention will allow the economy to advance steadily through what they describe as coexisting old and new growth drivers.

Alongside the GDP range, Beijing set other main projected targets for 2026, including consumer price index growth of around 2 percent and increases in residents’ incomes in step with overall economic growth. These goals are intended to link macro performance more closely with household welfare.

At the same NPC session, China announced a 7 percent rise in its defence budget, maintaining its position as the world’s second-largest military spender. While primarily a security measure, the move also forms part of the broader policy mix shaping fiscal priorities during a period of moderated but still significant economic expansion.