China lowers economic growth target to 4.5-5%

लगानी न्यूज

२१ फाल्गुन २०८२, बिहीबार १२:१०March 5, 2026

. China has kept its economic growth target for 2026 to 4.5 to 5 percent amid a slowdown in the domestic economy, international uncertainty and geopolitical risks. It also indicates an emphasis on continuity rather than rapid change in economic policy.

Premier Li Keqiang made public the goals in a government report presented at the inaugural session of the annual meeting of the National People’s Congress on Thursday.TAG_OPEN_div_50 He read the 35-page report for more than an hour. The new target is slightly lower than last year’s actual economic growth rate of 5 percent and about 5 percent in the previous three years. This is the lowest growth target since 1991.

While acknowledging the achievements, the government is clear about the difficulties and challenges facing China. China’s policymakers are trying to strike a balance between reviving a sluggish economy by ramping up domestic spending and establishing a world leader in advanced technologies such as artificial intelligence (AI) and robotics.

The annual report indicated that policies to support domestic demand would continue, but it was unlikely that any major new stimulus programs would be introduced to stimulate the economy in the short term.TAG_OPEN_div_46

In the draft budget presented by the government for 2026, the annual growth rate of defense expenditure has been capped at 7 percent.TAG_OPEN_div_44 It was about 7.2 percent in recent years. The nearly three,000-member National People’s Congress, which supports the policies set by the Communist Party, is expected to endorse its annual report and budget in its concluding session next week. It will also decide on a five-year plan to set priorities up to 2030.

“China is currently in the midst of trade tensions and the effects of a de facto war,” the report said.TAG_OPEN_div_42 Like many Asian countries, China is dependent on oil and natural gas from the Middle East, and the war there is likely to drive up energy prices and jeopardize supplies.

The report said that free trade is under severe pressure due to rising geopolitical tensions and pointed out imbalances such as weak demand when domestic production supply remains strong and the transition to new drivers of development is difficult.TAG_OPEN_div_40 The government concludes that it has rarely seen such a complex situation in many years, where external shocks and domestic problems go hand in hand.

Despite the slowing domestic economy, China has maintained growth through exports. Last year, China’s trade surplus reached a record level of nearly $ 12 trillion. But exports to the US have plummeted since US President Donald Trump sharply increased tariffs. However, even if exports to other countries have increased, some governments have protested because of concerns that their industries and jobs will be affected.

Premier TAG_OPEN_div_36 Li also pledged to improve people’s living standards and increase consumer spending. The government estimates that the slowdown in the real estate market has caused many Chinese to cut back on spending and affect millions of jobs.

The government plans to issue 250 billion yuan (about $3 TAG_OPEN_div_34 6 billion) worth of bonds to give discounts to consumers who buy new cars, appliances and other items. It will also adopt different policies from city to control the supply of new housing and reduce the number of unsold homes.

He Meru, a real estate agent in southern China, said the slowdown in the market has led to a sharp drop in income.TAG_OPEN_div_32 His monthly income is now around 10,000 yuan, a third of what it was five years ago. He said that even if there was only one transaction in two months, it should be considered lucky. According to him, it has become difficult for many people to find employment and the ability to spend has also weakened due to the decrease in income.

Analysts say that with the revival of the real estate market, measures are needed to increase social security spending and improve job stability. Ekaterina Bigos, AXA investment manager, said while reviving domestic demand is important for long-term sustainable economic growth, it will take time for China to return to a high-end consumption-oriented economy.

Meanwhile, China has also undertaken a massive restructuring of its military sector.TAG_OPEN_div_28 Defense spending has increased to 19 trillion yuan (about $270 billion). More recently, there has been a campaign to remove top military officers on corruption charges, which analysts see as an attempt to modernize the military and consolidate the Communist Party’s control over the People’s Liberation Army.

Nine TAG_OPEN_div_26 of the 19 delegates removed from the National People’s Congress before this year’s meeting were military officers. Reiterating the commitment to maintain full leadership of the party over the People’s Liberation Army (PLA), the report said that the policy to ensure political loyalty in the army would be implemented more vigorously.