China's economy to grow between 4.5% and 5% in 2026

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According to China's government work report submitted to the National People's Congress, the economy aims to grow between 4.5% and 5% in 2026. Premier Li Qiang emphasized that this target aligns with China's long-term objectives through 2035 and the broader goal of achieving socialist modernization. Setting a slightly moderate growth rate leaves room for structural adjustments, reforms, and risk management, the report noted. Analysts describe the target as pragmatic, balancing ambitious development with recognition of challenges such as structural economic shifts, persistent deflationary pressures, and international trade tensions.

The 2026 work report outlines several key economic indicators in addition to GDP:

• Urban unemployment rate: targeted around 5.5%

• New urban jobs: over 12 million expected

• Consumer price index (CPI) increase: approximately 2%

• Grain output: around 700 million tonnes

• Carbon emissions per unit GDP: expected to decrease by about 3.8%

• Personal income growth: in line with overall economic growth

  
  

Fiscal and monetary support will also help achieve these objectives:

• Budget deficit: targeted at around 4% of GDP to support consumption and public investment

• Government spending: maintaining scale to stimulate growth and raise living standards

• Monetary policy: continuing "appropriately accommodative" measures, including potential interest rate cuts and adjustments to reserve requirements

While the target marks the lowest official growth goal in decades, economists highlight that China is shifting from a “growth-first” to a “quality-first” approach. Traditional growth engines like the real estate sector and demographic expansion are slowing, but new drivers —innovation, consumption, productivity improvements, and the growth of the services sector —are increasingly important. Analysts also point to China’s large savings pool as a potential engine for private consumption-driven growth, while structural reforms aim to translate innovation into broader productivity gains.