China set its 2026 economic growth target at 4.5% to 5%, the lowest official annual goal in decades, down from about 5% last year. Officials said the cut reflects persistent weakness in domestic consumption and a troubled property market.
The target was announced at the annual “Two Sessions” political meeting as Premier Li Qiang opened the National People’s Congress (NPC). The nearly 3,000-member NPC is largely ceremonial and typically ratifies policy set by Chinese Communist Party leaders. At its closing session next week, the NPC is expected to approve the annual report, the 2026 budget and a five-year plan setting priorities through 2030.
The government acknowledged it expects growth below 5% this year but said it would “strive for even better results.” Authorities have repeatedly emphasized the need to rebalance the economy away from reliance on exports and heavy industry toward stronger domestic consumption as growth slows with economic maturation.
“While recognizing our achievements, we are also clear-eyed about the difficulties and challenges we face,” the government report said. Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the lower target signals a policy pivot that places greater emphasis on the quality of growth rather than speed.
Separately, Beijing announced a 7% increase in defense spending for 2026, allocating 1.90 trillion yuan (about €238 billion, $276 billion) — still roughly one-third of the U.S. military budget and the second-largest defence outlay worldwide after the United States. Premier Li said the spending rise would “boost our strategic capacity to safeguard China’s sovereignty, security and development interests.”
Analysts told AFP the defence budget will fund pay raises for military personnel, training and drills around Taiwan, enhanced cyberwarfare capabilities and purchases of advanced equipment. The announced figure was noted as slightly lower than last year’s total. Since 2016, China has typically increased military spending by around 6% to 7% annually.