China targets steady growth as it charts new economic course

Chinese Premier Li Qiang. [Reuters]

China has set its lowest economic growth target in 35 years, aiming for between 4.5 and 5 per cent GDP expansion in 2026.

According to China Daily, the target was unveiled on March 5 in the Government Work Report delivered by Premier Li Qiang to the National People's Congress during its annual session in Beijing.

The draft outline of the country's 15th Five-Year Plan (2026 to 2030), a blueprint for China's economic and social development over the next five years, was also submitted for review at the opening meeting of the fourth session of the 14th National People's Congress.

The Government Work Report stated that the GDP growth target is consistent with China's long-term development goals through 2035 and broadly reflects the country's long-term economic growth potential.

In the past five years, the Chinese economy recorded an average annual growth rate of 5.4 per cent, despite global headwinds, a figure higher than the global average. In 2025, the GDP of the world's second-largest economy surpassed 140 trillion yuan (about $20.3 trillion) for the first time.

Sun Xuegong, director-general of the department of policy study and consultation at the Chinese Academy of Macroeconomic Research, described the GDP growth target as both reasonable and necessary.

"The target aligns with China's medium- and long-term development objectives while also leaving room for structural adjustments as the country pursues high-quality development," observed Sun.

Other key 2026 targets include keeping the surveyed urban unemployment rate at around 5.5 per cent, creating more than 12 million new urban jobs, maintaining consumer price index growth at around 2 per cent and reducing carbon dioxide emissions per unit of GDP by about 3.8 per cent.

The deficit-to-GDP ratio for 2026 has been set at around 4 per cent, with the government deficit projected to reach 5.89 trillion yuan, an increase of 230 billion yuan compared to last year. Authorities will also maintain an accommodative monetary policy to ensure adequate liquidity in the financial system.

China plans to increase nationwide research and development spending by at least 7 per cent annually and targets a 17 per cent reduction in carbon dioxide emissions per unit of GDP between 2026 and 2030.

The report reaffirmed China's commitment to deepening reforms and expanding opening-up, with plans to strengthen the domestic market, accelerate new growth drivers and enhance self-reliance in science and technology.

"We will expand market access and open up more areas, particularly in the service sector," the report stated. "We will further expand opening-up trials for value-added telecom services, biotechnology, wholly foreign-owned hospitals and other fields, take well-ordered steps to expand opening up in the digital sector, and shorten the negative list for cross-border trade in services," it added.