China’s premier Li Qiang delivered a government work report at the opening of the annual National People’s Congress that blends cautious macro targets with an assertive industrial and fiscal agenda. The headline economic goal for 2026 is growth of 4.5–5 percent, alongside an urban unemployment target of roughly 5.5 percent and a consumer price goal of about 2 percent. The package couples a relatively modest growth aim with a continued tilt toward supportive fiscal and monetary policy, and heavy emphasis on technology, infrastructure and “green” targets.
The report signals a meaningful fiscal stimulus within a disciplined framing. Beijing proposes an overall deficit ratio of around 4 percent, raising the deficit to 5.89 trillion yuan (an increase of 230 billion yuan year-on-year) and pushing general public budget spending to a record c.30 trillion yuan. Authorities plan to issue 1.3 trillion yuan of ultra-long special sovereign bonds to support structural projects and the so-called “two new” and “two weight” priorities, while separately allocating 250 billion yuan of ultra-long bonds to encourage consumer trade-in programmes and establishing a 100 billion yuan fiscal–financial fund to spur domestic demand.
Beyond the annual figures, the report unfolds an agenda for the next five years. The draft outline of the 15th Five-Year Plan sets 20 main indicators across growth, innovation, livelihoods, low-carbon transition and security, and proposes 109 major projects grouped into six areas: new productive forces, modern infrastructure, urban–rural integration, social welfare, green transition and strategic safety. Notable targets include a cumulative 17 percent reduction in carbon emissions per unit of GDP over the five-year period and annual R&D spending growth of at least 7 percent.
Technology and industrial policy are front and centre. The government pitched a fresh round of “Double First Class” university reform, the creation of national interdisciplinary research centres, and expanded support for top-tier talent. It also called for accelerated commercialisation and scaling of AI across industries, backing open-source AI ecosystems, super‑scale compute clusters, satellite internet and a “5G+industrial internet” upgrade. Data governance and formal AI governance frameworks are slated for development alongside these investments.
The report contains several market-structuring measures: adjustments to consumption taxes, anti-monopoly and anti-unfair-competition enforcement, tighter fairness reviews, and measures to curb “involutionary” or wasteful competition. Beijing also intends to widen pilot reforms for market-based allocation of production factors and to dynamically adjust university disciplines to match economic needs — a nod toward more active central steering of education and research priorities.
On social policy, the administration repeated commitments to boost household incomes, expand employment (targeting more than 12 million new urban jobs), and roll out measures such as paid staggered leave for workers and expanded school breaks in locales that can support them. Grain output is targeted at about 1.4 trillion jin (roughly 700 million tonnes), underscoring continued emphasis on food security. Local governments are urged to act as prudent stewards of public finance — “managing household finances” — tightening non-essential spending while mobilising idle assets for development.
The rhetoric of the report was emphatic about resilience and national confidence. It framed the past year’s achievements — 5 percent GDP growth in 2025, strong gains in high-tech manufacturing and clean-energy infrastructure, and advances in domestic chip design and large-language models — as vindication of centralized leadership and policy direction. The language reinforces political unity while signalling continuity in priorities: stability, technological self-reliance and a managed, state-led economic transition.
For international observers the package has mixed signals. The sub‑5 percent growth target is lower than China’s pre-pandemic ambitions but realistic amid global headwinds; it underscores Beijing’s preference for manageability over headline expansion. The sizable use of ultra‑long bonds, explicit support for AI and infrastructure, and the expansion of targeted fiscal instruments show Beijing is willing to sustain demand-side support, but within a framework that emphasises fiscal discipline and tighter regulatory control of markets and institutions.
How these measures will play out matters beyond China’s borders. The emphasis on AI, compute capacity and open-source ecosystems suggests Beijing intends to be a leading supplier and regulator of advanced digital infrastructure. At the same time, continued state direction of research agendas, education, and industrial policy will shape global technology competition and supply chains. The fiscal choices — more borrowing focused on long-lived projects and consumption incentives — will determine how quickly domestic demand rebounds and how persistent local-government liabilities become.
In sum, the report sketches a Beijing that is cautious on headline growth yet assertive on strategic priorities: green transition, technological self-reliance, social stability and tightly managed market reforms. For markets, partners and rivals alike, the message is that China will pursue steady transformation under centralized guidance rather than a return to rapid, unchecked expansion.