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China has announced its GDP growth range for this year of between 4.5 and 5 per cent, the lowest in decades, and maintained a higher fiscal deficit in an acknowledgment that the world’s second-largest economy is set to expand at a slower rate.
The figure, released in a report ahead of the opening of the annual session of China’s rubber-stamp parliament, represents a modest step down from last year’s target of “around 5 per cent” and the actual growth of 5 per cent during 2025.
A range of 4.5 to 5 per cent was “broadly aligned with the long‑term objective of reaching mid-level developed-economy income by 2035”, said Standard Chartered senior China economist Carol Liao in a note ahead of the release of the report.
China’s Premier Li Qiang is set to officially announce the figure on Thursday during the reading of his “work report”, which lays out the government’s goals for the year ahead, at the opening of the National People’s Congress. Thursday’s session of the seven-day parliamentary gathering will be attended by President Xi Jinping, other senior leaders and thousands of delegates from across China.
China is aiming for global technological supremacy in its next five-year plan, which will also be officially released at the parliamentary meeting.
But the country’s growth plans will face severe challenges from a domestic slowdown in its own economy and deteriorating global conditions arising from US President Donald Trump’s trade war and attack on Iran.
The work report set a fiscal deficit target of 4 per cent for the coming year — the second year running in which Beijing has put it above its preferred level of 3 per cent.
It targeted consumer prices index growth of 2 per cent. This would be a challenge, analysts said, given prolonged deflationary pressures, with CPI nearly flat, producer prices declining and the deflator, the widest measure of prices in the economy, also negative.
China’s leaders have been focusing on pumping state funds into cutting-edge technology in their competition with the US for geopolitical leverage.
But they are also increasingly concerned about weak household sentiment, announcing schemes to try to boost consumer spending.
Among the delegates attending the NPC, Fan Shenghua, a representative of the wealthy industrialised coastal province of Zhejiang, said the growth target “will definitely be met”.
Fan, who worked in the high-end tea industry, said: “The premium and high-quality products are mainly consumed domestically; we can’t rely on foreign markets for that.”
He added: “We need to strengthen domestic demand. As long as we make our products well and push quality to the highest standard, there will be no problem.”
