China's New GDP Target Signals Pivot to Quality Over Quantity

China set its 2026 economic growth target at between 4.5% and 5%, a widely expected move that acknowledges slowing growth while giving policymakers more flexibility to address weakness at home and uncertainty abroad.

The new goal, announced by Chinese Premier Li Qiang on Thursday, compares with the "around 5%" growth that officials have aimed for over the past three years.

In 2025, China managed to hit that target, as resilient exports buoyed the world's second-largest economy despite a trade war with the U.S.

To help the economy meet expectations this year, the Chinese government said it would keep its fiscal deficit to 4.0% of gross domestic product, the premier said at the opening of the country's annual legislative meeting.

Beijing also set a consumer inflation target of around 2.0% for this year, signaling an effort to avert a deflationary spiral.

Last year, the consumer price index was flat from a year earlier, falling far short of the 2.0% target as the economy grappled with lingering deflationary pressure and weak demand.

Priority was also placed on steadying the labor market, which has been a further drag on consumer sentiment.

In 2026, the government said it plans to create 12 million jobs, same as last year, while capping the headline unemployment rate at 5.5%, also unchanged from 2025.

Local governments in China will be allowed to issue a total of 4.4 trillion yuan or about $637.91 billion in special-purpose bonds, which are normally used to fund investment projects, underlining efforts to support growth with fiscal stimulus.

Beijing also announced plans to issue 1.3 trillion yuan worth of ultralong treasury bonds, same as last year's quota.

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(END) Dow Jones Newswires

March 04, 2026 20:27 ET (01:27 GMT)