China sets lowest GDP growth target for decades as it braces for economic slowdown

"The low GDP target was reflective of a shift to what Beijing is calling high-quality growth that which is built on hi-tech industries and structural reform rather than the historic drivers of construction and exports. China is also grappling with downward pressures on its economic growth, such as an ageing population, an ailing property sector, weak domestic demand and a slowdown that is expected as a country moves up the income scale."

"This year is a pretty important year for structural reform, said Dan Wang, the China director for Eurasia Group, a political risk consultancy. Wang said that China was taking advantage of the one-year trade truce with the US to focus on reforming its economy away from export-led growth, while the lower target also reflected a higher tolerance for unemployment."

"Li Qiang, China's premier, announced the target for 2026 in the opening session of the National People's Congress (NPC), China's annual parliamentary gathering, which began on Thursday. Addressing the nearly 3,000 delegates gathered in the Great Hall of the People in Beijing, Li described 2025 as a truly remarkable year with profound and complex developments both at home and broad."

China has announced a record-low GDP growth target of 4.5-5% for 2026, marking the first time since 1991 that the target has fallen below 5%. Premier Li Qiang made this announcement at the National People's Congress, emphasizing a strategic pivot toward high-quality growth built on hi-tech industries and structural reform rather than traditional drivers like construction and exports. This shift reflects China's response to multiple economic pressures including an aging population, a struggling property sector, and weak domestic demand. The lower target also indicates greater tolerance for unemployment while maintaining a 5.5% urban unemployment target and pledging over 12 million new urban jobs. Experts view this as an opportunity for structural economic reform, though concerns exist about potential impacts on blue-collar workers as the economy prioritizes technology-driven industries.

Read at www.theguardian.com