China's parliament – the National People's Congress (NPC) – and advisory body – the National Committee of the Chinese People's Political Consultative Conference (CPPCC) – began their yearly sessions at the Great Hall of the People in Beijing on March 5 and 4 respectively. The meetings are commonly known as the “two sessions”. At the opening session of the NPC, Premier Li Qiang delivered his government work report. Highlights are the GDP growth target of 4.5% to 5% – the lowest since 1991 – and an increase in the defense budget of 7%, the 11th consecutive year of single-digit growth. In the past three years, the military budget has grown by 7.2% annually.
As 2026 is the first year of the 15th Five Year Plan (2026-2030), the delegates examined a draft outline of the plan, which the NPC delegates are expected to approve at the closing meeting on March 11. The social and economic development plan for 2026 was also discussed.
In his government work report presented at the opening session, Premier Li Qiang clarified key priorities, including technological innovation, industrial modernization, financial support, green development, new-quality productive forces and enhancing the competitiveness of industries. He said that the country would try to do better than the announced economic growth target of 4.5% to 5% to achieve the goal of doubling China's 2020 per capita GDP by 2035. Last year, the actual GDP growth was 5.0%, meeting the official target of “around 5%”. A slightly lower target would provide greater policy flexibility, enabling localities to focus on high-quality economic growth and maintain stable growth amid geopolitical headwinds. In an editorial, the People's Daily asked the question: “Can we go even faster?”, and answering “It's not that we cannot; it's that we choose not to.” The Chinese economy is projected to grow faster in 2026 than the U.S., Japan and the Euro area, according to the International Monetary Fund (IMF), with the U.S. economy projected to grow 2.4% in 2026, 0.7% for Japan and 1.3% for the Euro area.
Other major targets include:
• A consumer price index increase of around 2%. In 2025, consumer prices stayed unchanged from the previous year, missing the official target of a 2% increase as domestic demand remained subdued.
• A fiscal budget deficit of around 4% of GDP.
• Addition of 12 million new urban jobs.
• An increase in research and development (R&D) spending of 10% in 2026 and more than 7% for the five years to 2030.
Li said the government would roll out new measures to support the private sector, protect its legitimate interests, and support the young generation of entrepreneurs. It will strengthen emerging and future industries in 2026, with special attention on energy, quantum technology, embodied artificial intelligence (AI), brain-computer interfaces (BCI) and 6G technology. China aims to keep annual GDP growth within “an appropriate range” in the 2026-2030 period of the 15th Five Year plan. Premier Li called for vigilance amid deepening geopolitical risks, weak economic momentum abroad, and strains on multilateralism and free trade. Li warned that “long-standing problems and new challenges persist” in the country’s economic development and transformation. That includes a “pronounced” imbalance between supply and demand, “subdued” market expectations and “significant” risks in key sectors.
The Premier highlighted the country’s economic and technological achievements over the past year, including advances in artificial intelligence (AI), biomedicine, robotics and quantum technology. Li described how China went through unusual hardship last year because of external pressure. “Rarely in many years have we encountered such a grave and complex landscape, where external shocks and challenges were intertwined with domestic difficulties and tough policy choices,” he said. The government adopted more pro-active macro policies to stabilize growth, rolling out additional measures after the second quarter to offset the impact of new U.S. tariffs and ensure full-year targets were met, the Premier said. Fiscal spending was expanded and monetary policy eased, with interest rates and bank reserve requirements lowered to reduce financing costs. Trade-in programs and services consumption gained momentum, retail sales surpassed CNY50 trillion, and equipment investment rose 11.8%.
Targeted steps were taken to steady the property and stock markets, completing housing delivery tasks, and restoring stability and activity in capital markets, Li said, adding that by focusing on domestic affairs, China prepares for worst-case scenarios while working towards the best possible results, raising morale and confidence. Unilateralism and protectionism have escalated and market expectations have been hit by frequent volatility, and China’s foreign trade has come under considerable pressure, he said.
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