As China’s national political gatherings — the National People’s Congress and the Chinese People’s Political Consultative Conference (collectively known as the “Two Sessions”) — prepare to convene, attention is fixed on whether Beijing will adjust its 2026 economic growth target from “around 5%” to a range of “4.5% to 5%.” Recent downward revisions to GDP forecasts by select local governments, combined with projections from international institutions broadly anticipating a more conservative target-setting approach, have fueled speculation about the central government’s official stance.
The 5% Target Still Carries Significant Policy & Confidence Signal Value
Guo-Chen Wang, an Associate Research Fellow at the China Economic Research Institute of the Chung-Hua Institution for Economic Research (CIER), assessed that the probability of Beijing maintaining “around 5%” remains relatively high. Drawing on historical precedent, Wang noted that a shift to a range-based target typically signals that policymakers are laying the groundwork for a subsequent downward revision — the range itself functions as a deliberate policy signal. Were Beijing to pivot to a range format at this juncture, markets would likely interpret the move as an acknowledgment of weakening growth momentum.
Wang further noted that while some provinces and municipalities have reduced their targets, most have maintained a 5% target, leaving the overall policy tone without a distinctly conservative bias. He also highlighted that 2026 marks the opening year of China’s 15th Five-Year Plan. To adhere to the 2035 per-capita income development plan, China needs to maintain a moderate growth rate of about 5% until 2030. This makes it improbable that Beijing would easily abandon this symbolically significant benchmark.
Stable Expectations Outweigh Short-Term Adjustments
Wang acknowledged that China’s economy faces real challenges, both domestically and externally. However, he argued that setting a target of “around 5%” remains the more prudent approach to stabilize market confidence and maintain policy continuity. China is anticipated to continue advancing its “Dual New” initiatives, which focus on upgrading equipment and implementing consumer goods trade-in programs. These efforts aim to stimulate demand through improvements on the supply side, while also promoting manufacturing development and the establishment of “new quality productive forces.”
In the near term, markets are anticipating a more assertive fiscal policy stance, with the deficit ratio expected to exceed last year’s 4% threshold. This will support domestic demand and ease pressure on local government debt.
Authors: CIER Editorial Team
Date: March 2, 2026