5%-5%. This is the lowest growth target since 1991, according to major media reports. It is the first time the target has been lowered since it was cut to 'around 5%' in 2023.
A target was not set in 2020 due to uncertainties caused by the pandemic. The announcement was made during China's biggest political gathering, known as the 'two sessions', which began on Wednesday and usually runs for at least a week, bringing the country's leaders together for back-to-back meetings. According to reports, China is lowering its growth target to the lowest level in three decades, signaling a shift to a period of lower growth, when the economy, after decades of growth, has slowed down in recent years.
Some details of the 15th Five Year Plan for the world's second largest economy were released. Premier Li Qiang told delegates that the Five Year Plan will include investments in innovation, high-tech industries, scientific research and more efforts to boost household consumption. 'The Five Year Plan will include investments in innovation, high-tech industries, scientific research and more efforts to boost household consumption,' said Premier Li Qiang.
However, the specific measures included in the 15th Five Year Plan beyond investments in innovation, high-tech, and consumption have not been detailed. Beijing aims to reshape its economy in the face of issues including weak domestic consumption, an ongoing property crisis and trade tensions with the West. Beijing is concerned that weak domestic consumption makes the country too reliant on exports for growth.
Beijing has ambitions to upgrade the country's manufacturing industries. How exactly Beijing will address the weak domestic consumption and property crisis remains unclear. In January, official figures showed that China hit its 5% economic growth target for 2025 as a whole.
5% in the last three months of the year, weighed down by weak domestic spending and a long-running property crisis. More than two-thirds of China's provinces have scaled back their growth ambitions, either lowering the target figure or shifting language from aiming higher than a certain rate to targeting 'around' that level. ' This skepticism raises questions about how reliable the official growth figures are.
China's people have been cautious about spending, and China's persistent real estate crisis have continued to weigh on its growth. 19tn (£890bn). The population spends less, the real estate market has shaken significantly and the country has experienced a pandemic.
There is a trade conflict with the US to deal with and a generally turbulent world. The detailed implications of the trade tensions with the West on China's economic strategy are not yet fully known. Long-term economic projections for China beyond the current lowered growth target are also uncertain.
The event underscores a strategic pivot as the country navigates multiple domestic and international challenges.