One of the year’s biggest policy events for China watchers is set to start this week, bringing the top brass together to chart the course for the world’s second-largest economy.
At the National People’s Congress, roughly 3,000 representatives are expected to approve a five-year economic blueprint that will prioritize turning China into a technological superpower that can rival the U.S.
Beijing’s target-setting takes place against a high-stakes backdrop: The global environment is more volatile than ever as tariffs and geopolitical conflicts disrupt trade flows and markets, and China’s domestic issues continue to chip away at its economic might.
Here’s what to watch:
Growth Goal
About two-thirds of Chinese regions have already lowered growth ambitions for this year, signaling that Beijing could follow suit with the national target.
Economists expect the central government to aim for 4.5%-5% gross domestic product growth in 2026, a more flexible, pragmatic goal than the “around 5%” target it has had over the past three years.
Having a target range aligns better with officials’ efforts to control industrial overcapacity and advance structural reforms, Société Générale economists said.
Still, that doesn’t necessarily mean Beijing would be happy with economic growth of 4.5%, said Yu Song at UBS Securities, noting that the “around 5%” target was in practice treated more like “at least 5.0%.”
Beijing could stick with the status quo too. Range targets are historically reserved for times of major economic stress, and that’s not currently the case, economists at Morgan Stanley said. Beijing values anchoring confidence, and the first year of the 15th five-year plan is not the moment to blink, they said.
Fiscal Flop?
Beijing’s unwillingness to load the fiscal policy gun has been a source of frustration for many analysts who want bigger stimulus to pivot the economy to consumption-led growth.
Those hoping for bolder spending are likely to be disappointed, said Alex Loo at TD Securities. The prevailing message from China’s leadership in 2026 is likely to be one of macroeconomic policy continuity, he said, anticipating a modest budget prioritizing economic stabilization alongside sustained, targeted policy stimulus.
The official fiscal deficit in 2026 will probably stay at 4% of GDP and quotas for local government bond issuance are likely to remain broadly unchanged too.
Consumption
A lot of attention will be paid to how much emphasis policymakers place on revitalizing consumption.
For years, analysts have said officials need to do more to strengthen job-market prospects and the social safety net, and address the property slump to revive confidence and get households spending again.
Beijing has taken steps on all those fronts, but progress has been slow as policy changes continue to be drip-fed.
That playbook isn’t likely to change, with policymakers likely to keep relying on targeted measures to channel resources into strategic industries and reinforce support for social services and consumption, said analysts at Julius Baer.
Economists at Morgan Stanley expect policy continuity, not a pivot, as pressures from the U.S.-China tech rivalry keep Beijing focused on tech localization and industrial upgrades.
“We expect a flat initial fiscal envelope, a continued focus on tech and public capex, and reactive guardrails for consumption and property—keeping reflation a slow burn,” MS said.
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