China targets 4.5–5% economic growth in 2026, signals cautious expansion

China has announced a GDP growth target of between 4.5 and 5 percent for 2026, signalling a cautious but steady economic outlook as the country seeks to balance stable expansion with efforts to drive higher-quality development amid domestic structural pressures and an uncertain global economy.

According to the China Daily, the growth 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.

During the session, the draft outline of the country’s 15th Five-Year Plan (2026–2030) — 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.

Over the next five years, China expects to maintain its GDP growth within an appropriate range, with annual targets to be set based on prevailing economic conditions.

In the past five years, the Chinese economy has continued to grow steadily despite strong global headwinds, recording an average annual growth rate of 5.4 percent — a figure significantly 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. The 2026 growth projection comes as China navigates a complex economic landscape marked by both external shocks and domestic challenges.

Sun Xuegong, director-general of the department of policy study and consultation at the Chinese Academy of Macro-economic 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,” he said.

Other key development targets for 2026 include keeping the surveyed urban unemployment rate at around 5.5 percent, creating more than 12 million new urban jobs, maintaining consumer price index growth at around 2 percent, ensuring personal income growth keeps pace with economic expansion, maintaining a basic balance of payments equilibrium, and reducing carbon dioxide emissions per unit of GDP by about 3.8 percent.

The report also indicated that China will continue implementing a more proactive fiscal policy. The deficit-to-GDP ratio for 2026 has been set at around 4 percent, with the government deficit projected to reach 5.89 trillion yuan — an increase of 230 billion yuan compared to last year.

In addition, authorities will maintain an appropriately accommodative monetary policy to ensure adequate liquidity in the financial system. The aim is to keep aggregate financing and money supply growth aligned with projected economic expansion and consumer price index levels.

To advance innovation-driven and environmentally sustainable development, China plans to increase nationwide research and development spending by an average of at least 7 percent annually. The country also targets a 17 percent reduction in carbon dioxide emissions per unit of GDP between 2026 and 2030.

The Government Work Report outlined several priority tasks for 2026, including strengthening the domestic market, accelerating the development of new growth drivers, and enhancing self-reliance and capacity in science and technology.

It also reaffirmed China’s commitment to deepening reforms in key sectors and expanding high-level opening-up.

“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 noted.