China sets a lower economic growth target for 2026

BEIJING

China signaled continuity rather than change in its economic policy Thursday, announcing a slightly lower target for GDP growth this year in the face of a prolonged property slump and other headwinds at home and growing uncertainty abroad.

Premier Li Qiang announced a target of 4.5 percent to 5 percent annual growth in his annual report presented to the opening session of this year’s meeting of the National People’s Congress. That compares to actual growth of 5 percent last year and a target of about 5 percent in each of the preceding three years.

“While recognizing our achievements, we are also clear-eyed about the difficulties and challenges we face,” Li said, reading much of the 35-page report in a more than hourlong address.

China’s leaders are trying to balance the pursuit of two goals: Reviving a flagging economy by boosting domestic spending while also furthering Chinese leader Xi Jinping’s ambitions to build China into a global leader in AI, robotics and other cutting-edge technologies.

In line with the government’s approach in recent years, the annual report Thursday indicated it would continue to support domestic demand but not unleash any major new stimulus to boost economic growth in the short term.

In a draft budget for 2026, the government also trimmed China's annual increase in its defense spending to 7 percent, down from 7.2 percent last year.

The Congress, a largely ceremonial body that endorses policies set by the Communist Party leadership, is due to approve the annual report and budget at its closing session next week.

The economy has also been buffeted by tariff wars and actual wars. China, like much of Asia, is heavily dependent on oil and natural gas from the Middle East, and the American and Israeli war with Iran has driven up prices and threatened supplies.