China has set its GDP growth target at a record low of 4.5-5%, the first time since 1991 that the figure has fallen below 5%, reflecting an economic strategy that is moving away from export-led growth toward a model that leaders hope will be more resilient to external shocks.
Li Qiang, Premier of China, announced the 2026 target at the opening session of the National People’s Congress (NPC), China’s annual parliamentary meeting, which began on Thursday.
Addressing nearly 3,000 delegates gathered at the Great Hall of the People in Beijing, Li described 2025 as a “truly remarkable” year with “profound and complex developments both nationally and generally,” according to the text of the government work report.
The NPC will also review the 15th five-year plan, an economic and strategic document for 2026-2030.
The low-GDP target reflects a shift toward what Beijing calls “high-quality growth”: that based on high-tech industries and structural reforms rather than the historical drivers of construction and exports.
China is also grappling with downward pressures on its economic growth, such as an aging population, a weakened real estate sector, weak domestic demand and an expected slowdown as a country moves up the income ladder.
“This is a pretty important year for structural reform,” said Dan Wang, China director at Eurasia Group, a political risk consultancy. Wang said China was taking advantage of the one-year trade truce with the United States to focus on reforming its economy away from export-led growth, while the lower target also reflected a “greater tolerance for unemployment.”
Li announced a 5.5% target for urban unemployment and pledged to create more than 12 million new urban jobs, targets in line with previous years. But some experts have said China’s shift toward prioritizing high-tech industries may pose a risk to millions of blue-collar workers.
China and the United States agreed to a one-year pause in the trade war in October, and new negotiations are expected this month ahead of the planned visit of Donald Trump, the US president, to Beijing on March 31.
Despite the trade war’s disruption to global supply chains, particularly those originating in China, the country ended last year with a record $1 trillion trade surplus. Li said “economic and financial discipline” was a priority for 2026.
China also wants to focus on boosting domestic demand, something economists say is essential for China’s long-term economic stability. Last year, an editorial in state media 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
