Beijing – China has set its lowest annual growth target in decades, aiming for 4.5–5 percent in 2026, as authorities focus on tackling sluggish consumption and a weak property market. The government also announced a seven percent rise in its defense budget, maintaining its position as the world’s second-largest military spender, amid tensions with the United States and ongoing claims over Taiwan and the South China Sea.
Premier Li Qiang described the economic landscape as “grave and complex,” citing both external shocks and domestic challenges. The target is the lowest since 1991, excluding 2020 when no target was set due to the Covid-19 pandemic. Analysts note that China is shifting its priorities from high-speed growth toward “high-quality” growth, emphasizing industrial upgrading, technological investment, and green development.
Consumer confidence remains weak, with spending behavior showing caution across the country. The government plans to maintain a budget deficit of around four percent of GDP, with the public budget reaching 30.01 trillion yuan, including 1.3 trillion yuan in ultra-long treasury bonds and 4.4 trillion yuan in local government bonds for strategic projects.
While stimulus measures will continue, some economists warn that selective consumption subsidies and a continued supply-side focus may not fully address structural imbalances in the economy. In parallel, China released a draft of its 15th Five-Year Plan, highlighting goals through 2030, including boosting consumption, advancing high-tech industries like AI and semiconductors, doubling 2020 GDP per capita by 2035, reducing unemployment below 5.5 percent, and improving environmental performance.
