China sets lowest GDP growth target in 35 years

China sets lowest GDP growth target in 35 years

China has set its annual economic growth target for 2026 at a range of 4.5% to 5%, the lowest since 1991.

The decision comes as part of China's broader strategy to restructure its economy amid domestic and international challenges.

These include weak domestic consumption, an ongoing property crisis, and trade tensions with Western countries.

Five-year plan emphasizes innovation and high-tech industries

Premier Li Qiang unveiled the details of China's 15th five-year plan at the annual parliamentary session in Beijing.

The plan emphasizes investment in innovation, high-tech industries, and scientific research. It also aims to boost household consumption.

This is part of China's effort to reduce its reliance on exports for growth and upgrade its manufacturing industries.

Economic challenges and provincial growth revisions

Official figures from January showed that China met its 5% economic growth target for the whole of 2025.

However, the country also said its economy grew by just 4.5% in the last quarter of the year. This was largely due to weak domestic consumption and a prolonged property crisis.

Over two-thirds of China's provinces have lowered their growth ambitions, either revising targets downward or changing language from aiming higher than a certain rate to targeting "around" that level.

Easing local official stimulus pressure

China's new growth target is seen as a move to ease pressure on local officials to implement aggressive stimulus measures.

It also indicates a preference for fostering more sustainable growth drivers, especially domestic consumption and high-tech manufacturing.

The shift comes amid rising external uncertainties, including escalating conflicts in the Middle East that threaten key trade routes and add volatility to energy markets.