China sets lowest growth target in decades
By Michele Maatouk
Date: Thursday 05 Mar 2026
(Sharecast News) - China set its lowest growth target in decades on Thursday, at between 4.5% and 5.0% for 2026.
Beijing kept its budget deficit target unchanged from last year at "around 4%" of GDP, while the annual consumer inflation target was also unchanged, at "around 2%".
Premier Li Qiang, China's No 2 official, said at the opening of the annual assembly of China's rubber-stamp legislature, the National People's Congress (NPC), said: "Over the past year, the Chinese economy has proved remarkably resilient, forging ahead against headwinds.
"Rarely in many years have we encountered such a grave and complex landscape, where external shocks and challenges were intertwined with domestic difficulties and tough policy choices."
He acknowledged that the domestic economy remained in the midst of "deep-seated structural problems".
ING economist Lynn song said: "While it was debatable how much flexibility 'around 5%' entailed, most market participants viewed this as within 0.2-0.3pp of 5%. With the new target, there appears to be a tolerance for slower growth, which should give policymakers more flexibility to pursue quality growth, a priority in recent years.
"Combined with China's anti-involution drive, there will be a focus on reducing wasteful and duplicative investment while improving synergies and building on China's long-term strategic direction. As the 15th Five-Year Plan has laid out, the key focuses are on improving industrial modernisation, improving technological self-reliance, and ramping up domestic demand.
"With that said, the 4.5% threshold represents only a rather limited slowdown; China's longer-term growth ambitions remain unchanged. The government work report outlined an intention for 'laying a solid foundation for doubling per capita GDP by 2035 compared to 2020,' a key goal set by President Xi in the past."
Song said the softer GDP target was in line ING's expectations, as it had hints of this outcome earlier when various provinces also revised growth targets lower. "Our GDP forecast for the year is 4.6% year-on-year, which would fall within this range," he added.
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