China Sets Lowest GDP Growth Target Since 1991 Amid Global Volatility

The decision by the Chinese leadership to set a GDP growth target range of 4.5 to 5 per cent for 2026 represents a watershed moment in the nation’s economic management. Announced by Premier Li Qiang at the opening of the National People’s Congress, this target is the lowest since 1991, signaling a definitive move away from the era of hyper-growth toward a more sustainable, albeit slower, "high-quality" expansion. This pragmatic recalibration comes at a time when the world’s second-largest economy faces a confluence of internal structural decay and an increasingly hostile external trade environment.

Domestically, the primary anchor on growth remains the protracted downturn in the property sector. For decades, real estate and related infrastructure served as the engine of the Chinese economy, but the current deleveraging process has left a void that consumer spending and high-tech manufacturing have yet to fully fill. By setting a range-based target rather than a hard floor, Beijing is signaling to provincial leaders and global markets that it will not resort to the massive, debt-fueled stimulus packages of the past. Instead, the focus has shifted toward structural reforms and risk management, providing the necessary policy breathing room to address local government debt and banking vulnerabilities without the immediate pressure of chasing an ambitious growth figure.

“

Announced by Premier Li Qiang at the opening of the National People’s Congress, this target is the lowest since 1991, signaling a definitive move away from the era of hyper-growth toward a more sustainable, albeit slower, "high-quality" expansion.

The external landscape is equally fraught. The government work report, while drafted before the most recent escalations in Middle East turmoil, explicitly addresses the mounting frictions with the United States and its allies. The ongoing tariff wars and tightening restrictions on technology transfers have forced China to accelerate its drive for self-reliance. Shen Danyang, director of the State Council Research Office, noted that the external environment has become even more complex and volatile, suggesting that the number of unpredictable factors in 2026 could exceed historical expectations. The range-based target is specifically designed to retain flexibility in the face of these uncertainties, allowing the state to pivot its fiscal and monetary tools as geopolitical conditions dictate.