China on Thursday set its 2026 economic growth target at 4.5% to 5%, the lowest annual goal in decades. Last year’s target was about 5%. The reduction reflects Beijing’s effort to confront weak domestic consumption and a struggling property market.
The announcement came 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 endorses policies 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 outlining priorities through 2030.
The government acknowledged it expects growth below 5% this year but said it would “strive for even better results.” Chinese authorities have repeatedly said the economy must shift away from reliance on exports and heavy manufacturing toward greater domestic consumption. The country’s growth has been slowing for years as the economy matures.
“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, noted the move to a lower growth target signals a policy shift toward prioritizing the quality of growth over speed.
The government also announced a 7% increase in defense spending for this year. Beijing plans to allocate 1.90 trillion yuan (€238 billion, $276 billion) to defense — still roughly one-third of the US military budget and the second largest globally after the United States. Premier Li said the measures would “boost our strategic capacity to safeguard China’s sovereignty, security and development interests.”
Analysts told AFP the budget will cover pay raises for military personnel, training, drills around Taiwan, cyberwarfare capabilities and purchases of advanced equipment. The announced figure is slightly lower than last year’s total. Since 2016, China has typically raised its military spending annually by about 6% to 7%.
Edited by: Sean Sinico