Chinese Premier Li Qiang revealed in his
work report to the annual session of the National People’s Congress a growth target of 4.5-5 per cent, compared with around 5 per cent for 2025. It will have to stay around that level for 10 years to achieve Beijing’s goal of turning China into a moderately developed country by 2035. The
target, for the first year of the 15th five-year plan (2026-2030), has been set at a relatively moderate and realistic range to reflect the reality that externally, China faces a difficult and complex environment. Internally, the economic restructuring to enhance performance is unfinished and this year’s targets have been set to accommodate that
.Li said the government would strive for a higher growth rate. The target is therefore more like a bottom line it needs to achieve. The external environment is growing more complex by the day. That the work report was prepared before the outbreak of
another war in the Middle East, and presented as it raged, is a reminder of that reality.
To reach the gross domestic product target, China will rely on a two-pronged strategy of growth and stability, and continue to double down on innovation and an upgrading of manufacturing. Growth in government spending on science and technology of
10 per cent is evidence of that – higher than on defence, education or any other major area.
Emphasis is to be found throughout the
government work report on the need to grow innovation, with policy support including government-led funding and projects. This shows that innovation and technology are at the core of the development strategy. Another pillar of growth is to build a bigger domestic market – not just by stimulating consumption but by removing obstacles such as administrative and trade barriers to build a unified national market.
The report speaks of the need to invest more in people, through education, elderly care and social welfare – areas where infrastructure and supply are relatively weak but the potential consumer market is very big. It would create a growth engine for the economy, while also improving social security. In that regard, the government has set hard targets – not just slogans – such as achieving an average life expectancy of 80 years by 2030, along with targets for food security and energy.
Good news for tech
There was also continued support for the tech sector as China aims to raise the added value of core digital economy industries to 12.5 per cent of GDP, from 10.5 per cent in 2024. Different calculation methods complicate comparisons, but the US share is estimated at around 10 or 11 per cent, with Germany’s at 7 per cent and Japan’s at 6 per cent. China’s raised target means the government will attach greater importance and give more policy support to the tech sector, particularly in artificial intelligence, big data, cloud computing and computer chips. This is good news for the tech sector.
