China economic growth target set below 5% for the first time at key meeting

"The lowered growth figure reflects China's economic slowdown, triggered in part by the collapse of the country's property sector, which once accounted for between 25 and 30 percent of GDP. The growth target is quite realistic, the Economist Intelligence Unit's China economist Tianchen Xu said, noting the figure reflected China's trend towards more conservative expectations."

"Beijing does not necessarily see high growth rates as a good thing, because it may incentivise local officials to exaggerate growth with white elephant projects and data manipulation, Xu said. It's about delivering more tangible economic results such as household income growth and expanded access to public services."

"Facing a long-term economic slowdown, China is trying to transition from an economy driven by manufacturing and exports to one driven by consumption and cutting-edge technology. It is also aiming for more industrial self-reliance in the face of political headwinds from the United States."

China's National People's Congress established a GDP growth target of 4.5 to 5 percent for 2026, down from the previous 5 percent target, signaling the country's economic slowdown. The property sector collapse, which previously contributed 25-30 percent of GDP, significantly impacted growth. This lowered target represents a strategic shift from quantity-focused to quality-focused economic development, prioritizing household income growth and public services over inflated growth figures. Beijing deliberately avoids aggressive growth targets to prevent local officials from pursuing unsustainable projects and data manipulation. Simultaneously, China plans a 7 percent defense spending increase and aims to transition from manufacturing-export dependence toward consumption and technology-driven growth while building industrial self-reliance amid U.S. political pressures.

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