China is set to kick off its big policy meeting. What will be the key announcements?
A Chinese People’s Liberation Army (PLA) soldier stands guard outside the National Museum of China in Beijing on March 3, 2025, ahead of the country’s annual legislative meetings known as the “Two Sessions.”
Pedro Pardo | Afp | Getty Images
BEIJING — China’s top policymakers will unveil this year’s growth targets and stimulus plans at the annual parliament meeting that starts on Wednesday.
meeting called meeting “Two Sessions” It consists of a consultative congress that will start later in the day and the National People’s Congress that will open on Thursday. Chinese Premier Li Qiang will unveil a set of economic goals at the NPC, largely agreed upon at the December meeting.
At this year’s parliament meeting, policymakers are also expected to release details of China’s new five-year development plan, the 15th program in its modern history. Investors will be looking for clues about how Beijing plans to achieve its domestic technology goals.
The targets will mark the penultimate step towards China’s 2035 goals, which focus on achieving technological self-sufficiency.
Senior Chinese leaders, including top diplomat Wang Yi and the heads of the economic and finance ministries, often speak to the press during the Two Sessions. The meeting usually lasts about a week and is expected to end on March 11 this year.
Asia Society analysts say China’s anti-corruption campaign reduced the number of delegates We attended Two Sessions this year.
Here’s what economists expect Premier Li to announce on Thursday:
GDP growth around 4.5% to 5%
Many Chinese local governments have already lowered their growth targets for 2026, signaling that Beijing may pursue the national target.
Growth target below 5 percent lowest recordedAccording to The Asia Society, this rate was “about 5%” in the last three years. China did not set a GDP target in 2020 due to the epidemic.
“A slightly lower target would give policymakers more leeway to prioritize structural reform and improve data quality,” economists at the Economist Intelligence Unit wrote in a note last week, drawing a 4.6% growth forecast. he said.
But Morgan Stanley analysts see a “low probability” that Beijing will set a smaller growth target, adding that policymakers often set GDP ranges rather than single-figure targets for periods of major economic stress. The firm also pointed out that 2026 is the first year of China’s “15th five-year plan”, which requires faster growth to strengthen confidence.
Inflation is around 2 percent
Budget deficit 4%
Such a target would also match last year’s target, which marked a rare increase in government spending relative to GDP.
Budget deficit of 4 percent set in 2025 It’s the highest level on record dating back to 2010, according to data accessed through Wind Information. The previous high was 3.6% in 2020.
Deeper challenges
China’s policy announcements will be scrutinized for details on consumer incentives such as expansion exchange subsidies and any increased support for the struggling property market. The Two Sessions are likely to shed light on Beijing’s thinking about the impact of trade tensions in the United States and the evolving conflict in the Middle East.
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The world’s second-largest economy faces persistent challenges at home.
“There is a widening gap between Beijing’s goals (and data measuring economic performance) and the actual capacity of China’s policymakers to support domestic demand with the tools at their disposal,” Logan Wright, partner at U.S.-based research firm Rhodium Group, said in a report on Tuesday.
Wright added that China’s financial system lends heavily to inefficient local governments and state-owned enterprises to prevent them from collapsing, and fiscal spending is largely handled by the same institutions.
“The net result is a decline in returns in terms of investment and economic activity for the same volume of lending or fiscal spending, while private sector investment remains weak,” he said.
