TEMPO.CO, Jakarta - China on Thursday set its economic growth target for 2026 at 4.5% to 5%, which is the country's lowest annual growth target in decades.
Last year's target was around 5%. The lowered growth target comes as the government tries to address low domestic consumption and a flagging property market in 2026.
The announcement for the new growth target was made at the annual Two Sessions political gathering, before Premier Li Qiang opened the National People's Congress (NPC), China's parliament, on Thursday morning.
While China expects growth below 5% this year, the government report said that it would "strive for even better results."
The Chinese Communist Party (CCP) has repeatedly said the country's economic growth model must shift away from traditional drivers such as exports and manufacturing and towards consumption
"While recognizing our achievements, we are also clear-eyed about the difficulties and challenges we face," the report said.
China's economic development has been slowing down for years as the economy matures.
"The policymakers have been saying on many occasions that the quality of growth is more important than the speed of growth," Zhiwei Zhang, chief economist at Pinpoint Asset Management, wrote in a note quoted by the AFP news agency on Thursday. "The decision to cut the growth target for this year is a big step that signifies this shift of policy priority."
Defense budget gets a boost
This year, China, which has the second largest military budget after the United States, has decided to increase its defense spending by 7%.
Beijing plans to spend 1.9096 trillion yuan (€238.1 billion, $276.9 billion) on defense — around one-third of the US military budget.
"All these steps will boost our strategic capacity to safeguard China's sovereignty, security and development interests," Li said.
The announced Chinese military budget is slightly lower than last year's.
Since 2016, China has year-on-year increased its military budget by 6% to 7%.
The budget would finance military salary increases, training, drills around Taiwan, cyberwarfare capabilities and advanced equipment purchases, among other things, analysts told Agence France Press news agency.
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