China charts cautious growth path, prioritises innovation at 2026 ‘Two Sessions’
China has wrapped up its annual “Two Sessions” meetings with a clear policy direction for 2026: slower but steadier growth, stronger domestic consumption, and an intensified push for technological self-reliance.
The back-to-back gatherings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) – collectively known as the Two Sessions – are Beijing’s most significant political event, setting the country’s economic, legislative and social agenda for the year ahead.
At the centre of this year’s meetings was a GDP growth target of 4.5% to 5%, one of the lowest in decades, signalling a deliberate move toward “high-quality development” rather than rapid expansion.
Premier Li Qiang’s government work report acknowledged a “complex” global environment and weaker domestic momentum, prompting policymakers to adopt a flexible target range instead of a fixed figure.
Analysts say the move reflects a more pragmatic approach as China grapples with slowing demand, property sector challenges and geopolitical tensions.
Domestic consumption takes priority
Boosting household consumption emerged as the top economic priority, with authorities pledging targeted stimulus measures to encourage spending.
Plans include subsidies for green and smart consumer goods, investment in retail infrastructure such as shopping districts, and expansion of service sectors like tourism, healthcare and culture.
The government also signalled efforts to raise incomes, particularly for low-income groups, and strengthen social security systems to rebuild consumer confidence.
Beyond short-term recovery, China is doubling down on technological innovation and industrial upgrading as the backbone of future growth.
The newly launched 15th Five-Year Plan (2026–2030) places strong emphasis on developing advanced industries, including artificial intelligence, quantum technology, 6G, aerospace and biomedicine.
Officials also highlighted the “AI Plus” initiative, aimed at embedding artificial intelligence across sectors to create new growth drivers and reduce reliance on foreign technologies.
Managing risks and restructuring the economy
The meetings underscored growing concern over economic risks, particularly local government debt, financial vulnerabilities and industrial overcapacity.
Authorities pledged tighter regulation of investment, efforts to curb price wars in key sectors and reforms to improve efficiency in resource allocation.
At the same time, Beijing signalled continued support for business and a commitment to opening up its economy further to foreign investment.
Demographic challenges also featured prominently, with policymakers outlining measures to boost birth rates, improve public services and promote income growth.
Greater investment in education, healthcare and talent development was framed as essential to sustaining long-term economic transformation.
Legislative agenda and environmental goals
On the legislative front, the NPC reviewed and approved key policy frameworks, including the 15th Five-Year Plan and new laws on environmental protection and national unity.
China also reiterated its commitment to reducing carbon intensity and advancing its green transition, aligning with long-term climate targets.
Global positioning
Beyond domestic policy, China used the Two Sessions to reaffirm its commitment to global cooperation, trade diversification and multilateralism, while continuing to navigate tensions with major economies.
Taken together, the outcomes of the 2026 Two Sessions reflect a China recalibrating its economic model – shifting from speed to sustainability, from exports to domestic demand, and from dependence to self-reliance.
While challenges remain, the policy blueprint suggests Beijing is betting on innovation, consumption and structural reform to steer the economy through an uncertain global landscape. – compiled from various sources
