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Nazrin Abdul

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China has lowered its annual economic growth target to a range of 4.5%–5%, marking the country’s lowest expansion goal since 1991 as policymakers confront mounting domestic and global challenges.

The revised target was announced during China’s largest annual political gathering, known as the Two Sessions, where officials also revealed initial details of the country’s upcoming 15th Five-Year Plan for the world’s second-largest economy.

This is the first time Beijing has adjusted the target since 2023, when it set growth at “around 5%.” No official target was issued in 2020 due to the COVID-19 pandemic.

The lower target reflects China’s efforts to navigate a complex economic landscape marked by weak domestic consumption, a shrinking population, a prolonged property sector crisis, rising global trade tensions, and energy supply concerns linked to the Iran conflict.

Analysts say the more flexible target could give policymakers greater room to manage the economy without resorting to large-scale stimulus measures.

“The lower range gives China more flexibility to manage the economy without being forced into massive financial commitments simply to hit a precise growth figure,” said Jason Bedford of the East Asian Institute.

“China has used flexible targets before, particularly during the pandemic, but it is not the norm,” he added.

The Two Sessions, which began on Wednesday and typically lasts about a week, brings together China’s top political leadership for a series of high-level meetings. The country’s economic targets and policy priorities were outlined in a 46-page report presented by Chinese Premier Li Qiang.

The full text of the new Five-Year Plan, which will define China’s economic development strategy through 2030, is expected to be approved on the final day of the meetings and released shortly afterward.

According to Li, the plan will focus on innovation, high-tech industries, scientific research and boosting household consumption, reflecting Beijing’s concerns about the economy’s heavy reliance on exports.

The strategy also includes more than 100 major projects over the next five years aimed at expanding industrial capacity, particularly in technology, transportation and energy infrastructure.

Beijing is also pushing to strengthen its position as a global technology leader, including plans to integrate artificial intelligence across key industries.

At the same time, China intends to accelerate its green energy transition, reduce carbon emissions and improve environmental protection.

Demographic challenges are also a priority. The government said it will work to build a “childbirth-friendly society” by improving employment opportunities, education and healthcare support for families.

China’s aging population and declining birth rates remain significant obstacles for long-term economic growth, adding urgency to Beijing’s efforts to reshape its development model.