China sets lowest GDP growth target for decades as it braces for economic slowdown | China
China set its GDP growth target at 4.5-5%, a record low; this figure fell below 5% for the first time since 1991; This reflects an economic strategy shifting from export-led growth to a model that leaders hope will be more resilient to external shocks.
Chinese Premier Li Qiang announced the 2026 goal at the opening session of the National People’s Congress (NPC), China’s annual parliamentary meeting, which started on Thursday.
Addressing nearly 3,000 delegates gathered at the Great Hall of the People in Beijing, Li called 2025 a “truly remarkable” year with “profound and complex developments both domestically and broadly,” according to the text of the government’s work report.
The NPC will also review the 15th five-year plan, the economic and strategy document for 2026-2030.
The lower GDP target reflected a shift to what Beijing calls “high-quality growth,” built on high-tech industries and structural reforms rather than the historical drivers of construction and exports.
China is also grappling with downward pressures on economic growth, including an aging population, a troubled real estate sector, weak domestic demand and an expected slowdown as a country moves up the income scale.
“This is a very important year for structural reform,” said Dan Wang, China director at political risk consultancy Eurasia Group. Wang said China is focusing on reforming its economy away from export-led growth, taking advantage of a one-year trade truce with the United States, and that the lower target also reflects “higher tolerance for unemployment.”
Li announced a 5.5% target for urban unemployment and promised to create more than 12 million new urban jobs, in line with the same targets as previous years. But some experts say China’s drive to prioritize high-tech industries could pose risks to millions of blue-collar workers.
China and the United States agreed in October to pause their trade war for a year; More negotiations are expected this month ahead of US President Donald Trump’s expected visit to Beijing on March 31.
Despite the disruption caused by the trade war in global supply chains, especially chains originating from China, the country closed last year with a record trade surplus of $1 trillion. Li said “fiscal and economic discipline” is a priority for 2026.
China also wants to focus on boosting domestic demand, which economists say is essential for China’s long-term economic stability. An editorial in state media last year said consumption should be managed “with the same rigor” as production, a shift from the traditional focus on heavy industry to stimulate growth.
Additional research by Lillian Yang
