China economic growth target set below 5% for the first time at key meeting

Thousands of Chinese officials have gathered in Beijing for the opening session of the National People’s Congress (NPC), where delegates are approving the country’s economic and political roadmap for the next five years.

China has set a target of 4.5 to 5 percent gross domestic product (GDP) growth for 2026, according to a government report reviewed by the state’s official Xinhua News Agency on Thursday, down from a recent target of “around 5 percent”.

The lowered growth figure reflects China’s economic slowdown, triggered in part by the collapse of the country’s property sector, which once accounted for between 25 and 30 percent of GDP.

“The growth target is quite realistic,” the Economist Intelligence Unit’s China economist Tianchen Xu said, noting the figure reflected China’s trend towards more conservative expectations.

“It’s a further shift from a ‘number-first’ mindset towards a ‘quality-first’ one,” Xu told the Reuters news agency.

“Beijing does not necessarily see high growth rates as a good thing, because it may incentivise local officials to exaggerate growth with white elephant projects and data manipulation,” Xu said.

“It’s about delivering more tangible economic results such as household income growth and expanded access to public services,” Xu added.

China also intends to expand defence spending by 7 percent, the lowest rate in five years, according to Reuters, albeit higher than the rest of the region.

Facing a long-term economic slowdown, China is trying to transition from an economy driven by manufacturing and exports to one driven by consumption and cutting-edge technology. It is also aiming for more industrial self-reliance in the face of political headwinds from the United States.

Other ongoing challenges facing the world’s second-largest economy include deflationary pressure, weak consumer confidence, high youth unemployment and the fallout from US President Donald Trump’s tariffs and trade war.

‘Childbirth-friendly society’

Chinese Premier Li Qiang’s annual Government Work Report, presented at the NPC on Thursday, showed China’s GDP grew 5 percent to 140.19 trillion renminbi (RMB) ($20.28 trillion) last year.

The lengthy report also detailed other targets, such as China’s plans for its 2026 fiscal stimulus, including a target of about 30 trillion RMB ($4.3 trillion) in public spending, according to Xinhua.

China will continue state support for advanced industries such as “integrated circuits, aviation and aerospace, biomedicine, and the low-altitude economy”, the work report said, referring to the use of drone technology in everything from logistics to agriculture and emergency services.

Officials have, according to reports, started targeting the problem of “involution” or over-competition between domestic firms, which often leads to overproduction and low-quality products.

The work report also touched on how China plans to tackle social and environmental issues, such as population decline, which has been triggered by its ageing society, falling birthrate and the long-term impact of its now-abandoned one-child policy.

China aims to become a “childbirth-friendly society”, Xinhua reports, and the country intends to expand services for its growing population of people over 60.

It also aims to hit peak carbon emissions by 2030 as it transitions to more renewable energy sources from coal and other fossil fuels, the report said.

The NPC is being held in Beijing alongside the Chinese People’s Political Consultative Conference (CPPCC), a separate advisory body to the country’s leadership that submits feedback and proposals for future legislation.

Together, the NPC and CPPCC are known as the “Two Sessions”.

The most important event of the week will be the release of China’s 15th Five-Year Plan, which will outline its mid-term development targets for 2026 to 2030. China aims to double its 2020 GDP per capita by 2035 to become a “moderately developed” economy, according to Xinhua.