China sets 2026 growth target at 4.5%–5%, lowest target since 1991

China set its 2026 economic growth target at 4.5%-5%, marking its lowest expansion goal since 1991 as policymakers confront domestic and external headwinds.

The target was unveiled at this year’s National People’s Congress, part of the annual “two sessions” political gathering, alongside priorities from the forthcoming 15th Five Year Plan, according to the BBC and FXStreet.

Premier Li Qiang’s work report laid out measures to support demand, upgrade industry, and manage financial risks.

What Beijing announced and why it matters

China lowered its annual growth target to a 4.5%-5% range for the first time since it was cut to “around 5%” in 2023, the BBC reported.

The goal reflects a recalibration as the economy grapples with weak household spending, a property downturn, demographic pressures, trade tensions, and energy challenges.

Li Qiang’s 46-page report to delegates prioritized investment in innovation, high-tech industries, and scientific research, while also seeking to boost household consumption.

The plan underscores concern that subdued domestic demand has left the economy too reliant on exports for growth.

Policy priorities set out by Li Qiang

According to FXStreet’s summary of the annual report presented at the NPC, Beijing intends to maintain a “moderately loose” monetary stance and adjust consumption taxes.

Authorities aim to stabilize the property market, curb local government debt, promote cross-border use of the renminbi, further open the services sector, and prevent disorderly and wasteful local investment.

The BBC added that more than 100 major projects are planned over the next five years to expand industrial capacity, focusing on science and technology, transportation, and energy.

China also aims to push green energy, reduce emissions, and strengthen environmental protection.

Demographic policies include building a “childbirth-friendly society” and addressing employment, education, and healthcare.

Growth headwinds and reliance on exports

Official figures showed China hit its 5% economic growth target for 2025 as a whole, though growth slowed to 4.5% in the final quarter on weak consumption and property stress, the BBC reported.

More than two-thirds of provinces have since scaled back ambitions, often shifting to targets “around” specific levels.

Manufacturing and exports have been a key support, with what the BBC called the world’s biggest-ever trade surplus last year of $1.19 trillion (£890 billion).

Yet that reliance creates vulnerability, according to Georgetown University researcher Ning Leng, who noted that the United States can sense the weakness.

Ning said China has poured resources into redirecting trade to sustain manufacturing, while US tariffs under President Donald Trump have added pressure.

China's CSI 300 gained 1.41% on Thursday and gained 19% over the past year.

The bottom line

Beijing’s 4.5%-5% goal signals a pragmatic shift as it balances slower growth with efforts to upgrade industry, lift consumption, and contain financial risks.

The mix of policy support and structural reforms outlined by Li Qiang aims to steady the economy while reducing its dependence on exports, a path markets will watch closely in the months ahead.