China has established an economic growth goal of 4.5% to 5% for 2026, a target that is modestly below the 5% pace it has pursued in recent years. The announcement arrived alongside the country's 15th five-year plan, which highlights commitments to expand investment in advanced technologies - including artificial intelligence - underpin scientific research and stimulate household spending.
Officials set an annual budget deficit target of 4% of gross domestic product, matching last year's level. That parity suggests Beijing intends to keep fiscal stimulus broadly consistent with the recent past rather than substantially increasing it.
The policy rollout coincided with the opening of the "two sessions" in Beijing, with the Chinese People’s Political Consultative Conference - the nation's top advisory body - beginning its annual session on Wednesday. Among the social measures announced, authorities pledged to raise monthly pension payments and to increase medical insurance subsidies, with a particular emphasis on benefits for non-working rural citizens.
By choosing a 4.5% to 5% range for 2026 growth, policymakers appear to accept a slightly higher tolerance for slower expansion as the economy continues to contend with prolonged underperformance. A significant component of that underperformance has been weak domestic demand and slack household spending; previously deployed measures to boost consumer activity have produced limited gains.
At the same time, China's export sector has shown resilience. The export industry largely moved past disruptions linked to U.S. trade tariffs in 2025, helped by continued external demand. The country reached its annual 5% GDP forecast in both 2024 and 2025, though analysts have cautioned that headline growth conceals underlying weaknesses in other parts of the economy.
The 15th five-year plan's emphasis on advanced technologies, scientific research and consumption suggests Beijing is aiming to balance support for tradable sectors with policies intended to lift domestic activity. The scope and effectiveness of that support will be watched closely by markets, businesses and households alike.