China’s Two Sessions Open... Will the “5%” Growth Target Be Maintained?

About a Week of Sessions Begins Today

Speculation on Setting a 4.5% to 5% Growth Target

Focus Expected on Technological Self-Reliance in AI, Humanoids, and Space

The Two Sessions (Lianghui)—the annual gatherings of the National People’s Congress and the Chinese People’s Political Consultative Conference, which are China’s largest political events—will open on March 4, 2026. Geopolitical tensions are rising as the United States and Israel have launched airstrikes against Iran, a country allied with China, and U.S. President Donald Trump is scheduled to visit China later this month. Nonetheless, this year’s Two Sessions are expected to focus on setting the country’s economic direction. The main point of interest is whether China will maintain its annual GDP growth target at “around 5%” for a third consecutive year.

This year’s sessions will begin in the afternoon at the Great Hall of the People in Beijing, with the opening of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), China’s top political advisory body, marking the start of about a week of events. On the morning of March 5, the National People’s Congress (NPC)—China’s top legislative body—will commence at the same venue. During the government work report by Chinese Premier Li Qiang, the country’s economic growth target for 2026, key economic policy directions, and the budget plan will be released.

Xi Jinping, President of China. Photo by Xinhua News Agency

Whether China will adhere to the “around 5%” growth target is a critical question. China refers to the effort to maintain growth in the 5% range as “Baowu,” and has devoted itself to this target for the third year since 2023. However, experts note that achieving this again will be challenging, given the prolonged slump in the real estate market, sustained weakness in domestic demand, and lingering trade tensions with the United States.

Major foreign media outlets such as The Wall Street Journal and The Guardian have forecast that China may, for the first time this year, set a growth target in the 4.5% to 5% range. This speculation is supported by the fact that 21 out of 31 provinces and municipalities across the country lowered their growth targets ahead of the Two Sessions. The International Monetary Fund (IMF) has projected China’s economic growth rate for this year at 4.5%.

On the other hand, as 2026 marks the first year of China’s 15th Five-Year Plan, which is a mid-to-long-term development blueprint, there are also expectations that the government will stick to the “around 5%” target. China’s stated goal is to raise per capita gross domestic product (GDP) to 30,000 dollars (approximately 44.28 million won) by 2035. However, the IMF estimates China’s per capita GDP last year at about 13,806 dollars. In order to achieve the 30,000 dollar goal, it is necessary for China to maintain a growth target of around 5%.

Economists at Morgan Stanley have analyzed that “China has only presented a growth target as a range in times of severe economic crisis, which is not the case now.” They also explained that it is unlikely for China to show a retreat from its growth targets in the first year of the 15th Five-Year Plan.

This 15th Five-Year Plan is expected to focus on technological self-reliance. According to Reuters on March 2 (local time), China has designated artificial intelligence (AI), humanoids, and space as the core industrial policy areas within the framework of the 15th Five-Year Plan, and these issues are expected to be addressed during the Two Sessions.

China is also expected to increase its defense budget ahead of the 100th anniversary of the founding of the People’s Liberation Army in 2027. From 2023, China has raised its defense budget by 7.2% for three consecutive years, and there are discussions that this year’s increase could be even greater. In addition, there is a need to fill the leadership vacuum in the military created by the purges of high-ranking officials such as Vice Chairman Zhang Yuxia of the Central Military Commission and Chief of Staff Liu Zhenli. A press conference by Wang Yi, Director of the Office of the Central Foreign Affairs Commission and Minister of Foreign Affairs, scheduled around March 7, is also drawing attention. At this event, China’s diplomatic strategy for the year will be revealed. Recently, diplomatic tensions have escalated between China and the United States as the U.S. has conducted airstrikes against China’s allies, including Iran and Venezuela.

Attention is also focused on whether China will address issues related to the Korean Peninsula, which were not mentioned separately last year. Regarding the war in Iran, on March 1, a spokesperson for the Ministry of Foreign Affairs issued a statement declaring, “We firmly oppose and strongly condemn it.” However, Sun Degang, Director of the Middle East Research Center at Fudan University, told the South China Morning Post (SCMP) that even if the crisis surrounding Iran deepens, domestic economic issues will continue to command the most attention within China, and that discussions on the Iran crisis will likely be grouped with other conflicts such as the war in Ukraine.

This content was produced with the assistance of AI translation services.