China sets a lower economic growth target of 4.5% to 5% for 2026 as challenges loom

China has set an economic growth target of 4.5% to 5% for this year, a slight decrease in the face of a prolonged property slump and other headwinds and global uncertainty

BEIJING -- China signaled continuity rather than change for its economy, announcing Thursday a slightly lower target for growth this year in the midst of a property slump and other headwinds at home and growing uncertainty abroad.

Premier Li Qiang announced a target of 4.5% to 5% annual growth in his report presented to the opening session of this year’s meeting of the National People’s Congress. That compares to actual 5% growth last year and a target of about 5% in the three years before. It's the lowest growth target since 1991.

“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 striving to balance pursuit of two goals: reviving the flagging economy by boosting domestic spending while also furthering top leader Xi Jinping’s ambitions to build China into a global leader in AI, robotics and other advanced 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 growth in the short term.

In its draft budget for 2026, the government also trimmed China's annual increase in defense spending to 7%, down from 7.2% in recent years. The nearly 3,000-member Congress, a largely ceremonial body that endorses policies set by Communist Party leaders, is due to approve the annual report and budget at its closing session next week, along with a five-year plan setting policy priorities until 2030.