China’s National People’s Congress kicked off its fourth session with Premier Li Qiang delivering the government work report, setting a GDP growth target of 4.5% to 5% for 2026—the lowest since 1991—while emphasizing high-quality development, consumer spending boosts, technological self-reliance, and a 7% rise in defense spending. The session also advances discussions on the 15th Five-Year Plan (2026-2030), signaling pragmatic adjustments to economic challenges including weak demand, property sector pressures, and global uncertainties.
China’s National Legislature Convenes Annual Session Amid Focus on Economic Rebalancing and Strategic Priorities
The opening ceremony featured addresses and reports that set the tone for the week-long deliberations running through March 12. Premier Li Qiang presented the comprehensive government work report on behalf of the State Council, highlighting achievements from the prior year while acknowledging persistent headwinds such as subdued consumption, a protracted property downturn, and external pressures from trade frictions and geopolitical shifts.
A central element of the report is the establishment of a GDP growth target range of 4.5% to 5% for 2026. This marks a deliberate shift to a flexible band rather than a single-point figure, reflecting policymakers’ recognition of heightened uncertainties and a strategic pivot toward sustainable, quality-driven expansion over aggressive headline growth. The target is below the approximately 5% pace targeted in recent years and represents the most conservative official aspiration since the early 1990s, underscoring a tolerance for moderated expansion to facilitate structural adjustments.
Key economic targets outlined include:
Consumer price index (CPI) increase of around 2%, aiming to maintain price stability without deflationary risks.
Fiscal deficit targeted at a record high level to support stimulus, with continued emphasis on proactive fiscal policy.
Urban unemployment rate controlled around 5.5%, with efforts to expand employment channels, particularly for youth and college graduates.
The report stressed boosting domestic demand as a core priority, with measures to enhance consumer confidence and spending power. Initiatives include steps to stabilize the real estate market, expand service sector opportunities, and promote income growth for middle- and lower-income groups. Policymakers aim to counter the drag from the property slump, which has eroded household wealth and restrained spending.
Innovation and technological advancement remain at the forefront of China’s agenda. The government pledged accelerated efforts in self-reliant innovation, particularly in core technologies such as semiconductors, artificial intelligence, quantum computing, and biotechnology. Support for new quality productive forces—encompassing advanced manufacturing, green industries, and digital economy sectors—will be intensified to drive long-term competitiveness.
On the fiscal and monetary front, a proactive fiscal stance will be maintained, including increased special-purpose bonds and targeted investments in infrastructure, rural revitalization, and ecological projects. Monetary policy will remain prudent yet flexible, with tools deployed to ensure ample liquidity and lower financing costs for businesses.
Defense modernization received prominent attention, with a 7% increase in the military budget proposed for 2026, bringing expenditures to approximately 1.9 trillion yuan (around $270 billion). This adjustment supports enhancements in combat readiness, development of advanced capabilities, and modernization of the People’s Liberation Army amid regional security dynamics.
A major highlight of this year’s session is the deliberation and expected adoption of outlines for the 15th Five-Year Plan, covering 2026 through 2030. This blueprint will shape China’s trajectory in the second half of the decade, prioritizing high-quality development, common prosperity, ecological civilization, and opening-up in a more uncertain global environment. Discussions will encompass goals for technological leadership, urban-rural integration, population policies addressing aging demographics, and strategies to navigate external challenges like potential trade disruptions.
The session’s agenda includes 11 key items, such as reviewing draft laws, personnel appointments, and budget approvals. Deputies will engage in group discussions, sector-specific consultations, and votes on resolutions. The concurrent Chinese People’s Political Consultative Conference (CPPCC) session complements the NPC by providing advisory input, with overlapping themes on economic stabilization and strategic planning.
This annual convening of China’s national legislature not only ratifies policy but also signals continuity in leadership priorities under President Xi Jinping, with a clear focus on resilience, innovation, and internal circulation to bolster economic stability.
Disclaimer: This is a news report based on publicly available information and official proceedings. It is for informational purposes only and does not constitute financial, investment, or policy advice.
