Beijing55 minutes ago
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The National People’s Congress (NPC), one of China’s ‘two sessions’ meetings, began in Beijing on Thursday.
China has reduced the GDP growth target for 2026 to 4.5-5%. This is the first time since 1991 that China has kept its target below 5%. Chinese Premier Li Qiang made this announcement during the annual parliamentary meeting ‘Two Sessions’ held in Beijing.
China also released the draft of the 15th Five-Year Plan (2026-2030) on Thursday, which will be formally voted on next week. This plan includes topics like increasing consumption and emphasizing innovation, which will be Beijing’s priority for the next five years.
Emphasis on ‘high-quality growth’ instead of exports
China is now changing its economic strategy. Till now China’s economy was mainly based on construction and exports, but now the government’s focus is on ‘high-quality growth’.
This means that now efforts will be made to strengthen the economy through high-tech industry and structural reforms so that the impact of external shocks is minimized.
China’s Premier Li Qiang said that the year 2025 was a ‘really wonderful’ year.
Real estate and aging become a big challenge
China is currently struggling on many fronts. The country’s real estate has been in crisis for a long time. Domestic demand has weakened and the population is aging rapidly. Experts say that as a country moves above the middle income group, its pace naturally slows down.
According to Dan Wang, director of Eurasia Group, China is now focusing on domestic reforms instead of exports and the government has also increased its tolerance regarding unemployment.
Target of 1.20 crore new jobs, but challenges remain
The Chinese government has pledged to create more than 1.20 crore new jobs in cities this year. The target of unemployment rate has been set at 5.5%. However, experts believe that giving priority to high-tech industries may pose a risk to crores of blue-collar workers (working class) who are associated with traditional manufacturing and construction sectors.
7% increase in defense budget
Despite the economic slowdown, China has increased its defense budget by 7%, which is slightly less than in previous years.
Expert View: According to Guo Shan, partner at Hutong Research, China needs an average growth of only 4.3% over the next decade to become a developed country by 2035. Therefore, even this modest target shows Beijing’s confidence.
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