Premier Li Qiang used the government work report to sketch a pragmatic economic plan for 2026 that leans on fiscal support, targeted industrial policy and social measures rather than an engine of raw growth. China will aim for GDP growth of 4.5–5% next year, a range that signals a shift from high-speed expansion to stabilization and structural adjustment after five years of 5.4% average growth. The package combines a higher general budget, extra long-term sovereign bonds and large allocations of local special bonds alongside micro‑measures to lift incomes and consumption.
The report reviewed 2025 as a year of steady but unspectacular progress: headline GDP growth of 5%, 12.67 million new urban jobs, and record outputs in grain and new-energy vehicles. It also recounted longer-term achievements — manufacturing value added has remained the world’s largest for 16 consecutive years and average disposable incomes have risen at an annual 5.4% clip over the past five years — to frame 2026 as a continuation of incremental improvement rather than a reset.
On fiscal policy Beijing proposes to keep the deficit ratio at about 4% while increasing the deficit amount by 230 billion yuan. The authorities plan to push general public budget spending to 30 trillion yuan for the first time, issue 1.3 trillion yuan of ultra‑long special sovereign bonds and allot 4.4 trillion yuan of local government special bonds. In addition to a 755 billion yuan central budget investment plan, 800 billion yuan of ultra‑long bond proceeds will be channelled into so‑called “two‑priority” construction projects, and 250 billion yuan of the special sovereign bond will be earmarked to support consumption upgrades such as trade‑in programmes.
Social and demand-side measures are pragmatic and incremental. The government seeks more than 12 million new urban jobs in 2026, holds the consumer price index target near 2%, and plans modest increases to social transfers — raising monthly minimum basic pensions by 20 yuan and boosting per‑capita central subsidies for public health insurance by 24 yuan. The report also proposes a package to raise household incomes through measures to help low‑income groups, improve property‑type income streams and tweak wage and social insurance arrangements.
Strategically, the report emphasises a renewed industrial thrust toward higher value-added and future sectors. Beijing singled out integrated circuits, aerospace, biopharmaceuticals and low‑altitude aviation as near-term “new pillars,” while also promoting future industries such as next‑generation energy, quantum technology, embodied intelligence, brain‑computer interfaces and 6G. The government will deepen the “AI+” agenda and build a national unified market through tools ranging from capacity controls and standards to price enforcement — and a stated intent to crack down on “involutionary” or unhealthy competition.
The document balances opening and protection. It promises to widen pilot openings in areas including value‑added telecommunications, biotechnology and wholly foreign‑owned hospitals, even as it sustains heavy state direction in strategic sectors. Rural and urban policy adjustments — from a new round of land‑contract extensions in pilot provinces to easing admission rules for migrant children in some inflow cities — underline an approach that seeks to shore up social stability and domestic demand while controlling macro risk.
For foreign markets and supply chains the plan has mixed implications: slower headline growth points to softer Chinese import demand than in past decades, but large fiscal injections and targeted investment in advanced manufacturing and green energy will sustain global demand for capital goods and specialised inputs. At home, the approach reveals Beijing’s trade‑offs: prioritise technological self‑reliance and greener growth, shore up household incomes to support consumption, and lean on bond finance to avoid a one‑off stimulus that might destabilise debt and asset markets.