A new chapter begins in the 15th Five-Year Plan

Editor’s note: Premier Li Qiang delivered the government work report in Beijing on Thursday. Experts shared their views on the report content, especially the growth target, major strategic tasks including building a robust domestic market, achieving greater self-reliance and strength in science and technology and expanding high-standard opening-up. Excerpts follow:

A slower but higher-quality growth target

China set a GDP growth target of 4.5 to 5 percent for 2026 at the National People’s Congress, a modest downgrade from the roughly 5 percent targets of recent years and broadly in line with expectations that the economy will gradually transition to slower but higher-quality growth. The lower target signals that policymakers may be increasingly comfortable allowing growth to moderate as China enters the 15th Five-Year Plan (2026-30) period. Even so, growth in the mid-4 percent range would still be broadly consistent with Beijing’s longer-term goal of doubling per capita GDP by 2035, suggesting authorities remain focused on maintaining steady expansion while improving productivity and economic quality.

Fiscal policy announced at the NPC was supportive but somewhat less expansionary than expected. The government maintained a budget deficit target of around 4 percent of GDP, while continuing to rely on tools such as ultra-long special treasury bonds and local government special bonds to support investment and strategic projects. The government work report placed somewhat greater emphasis on boosting domestic consumption, including through subsidies, service-sector development and policies aimed at supporting employment and household incomes.

However, the measures appear relatively targeted, suggesting the shift toward consumption will likely be gradual.

Monetary policy will remain supportive but measured. The report reiterates that China will continue an “appropriately accommodative monetary policy” and maintain ample liquidity in the financial system, with explicit references to the potential use of reserve requirement ratio cuts and interest-rate reductions. However, the continued emphasis on structural and targeted credit measures rather than broad stimulus underscores a preference for measured monetary support that complements fiscal policy in stabilizing growth while addressing persistent challenges such as low inflation and external uncertainty.

Overall, the report signals that China is prioritizing economic quality, technological upgrading and resilience, even if that means accepting somewhat slower headline growth in the near term.

Sheana Yue, a senior economist at Oxford Economics.

China injects stability into a volatile world

The government work report sets China’s 2026 consumer price index (CPI) growth target at around 2 percent, establishing a crucial anchor amid mounting economic pressures. This target reflects the government’s careful calibration between sustaining economic stability and managing inflation risks.

China currently faces pressures on two fronts. First, from a fundamental perspective, supply remains relatively strong while demand is comparatively weak. In this context, protecting reasonable corporate profit expectations becomes essential. A 2 percent CPI increase signals that supply and demand are roughly in balance. Drawing from international experience, such a rate represents a moderate inflation level, providing enterprises with stable returns and enabling the continuation of normal economic activity. In essence, it anchors expectations for both producers and consumers, offering a clear signal for planning and investment.

Second, inflationary pressures are subject to significant uncertainties. External shocks, notably rising oil prices linked to the tensions in the Gulf region, as well as increased costs from global trade realignments, could push input prices higher. These factors make the 2 percent target both reasonable and challenging. Achieving it will require careful policy management and market responsiveness.

Establishing this CPI anchor also stabilizes expectations in the broader economic ecosystem. In the real economy, it helps coordinate supply and demand; in financial markets, it provides investors with a clearer framework for decision-making. When expectations are stable, economic factors — from labor allocation to capital investment — are more likely to align efficiently, supporting balanced and sustainable growth.

In sum, China’s 2 percent CPI target for 2026 is more than a numerical benchmark. It serves as a stabilizing reference that balances economic fundamentals with external uncertainties, safeguards reasonable corporate profits, and helps guide expectations in both the real economy and financial markets. By providing this clear anchor, it encourages more efficient allocation of resources and supports steady, resilient economic growth.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

More time, more consumption

For years, discussions about China’s consumption challenge have focused on income, employment and social security. Yet an often overlooked factor may be just as important: time.

Several measures highlighted in China’s 2026 government work report offer an intriguing clue. Alongside traditional economic policies, the report calls for stronger consumer rights protection, while spring and autumn holidays will be introduced for primary and secondary school students, and the system of staggered paid leave will be implemented for workers.

At first glance, these policies may appear to be about welfare or labor protection. But they also reflect a deeper policy logic: expanding consumption requires not only purchasing power, but also the time to use it.

China’s middle-income group has expanded rapidly in recent years, and with rising incomes, consumption patterns have naturally begun to shift. After basic living needs are met, households increasingly seek what economists call “developmental” and “experiential” consumption — travel, education, cultural activities and leisure.

But these forms of consumption are highly time-intensive.

In reality, many urban professionals find themselves caught in a familiar dilemma. Work hours have stretched far beyond the traditional nine-to-five schedule, often extending late into the evening. Under such conditions, even households with stable incomes may lack the time or energy to pursue higher-quality consumption.

The result is a paradox: income rises, yet consumption growth remains constrained.

In some cases, consumers may even retreat toward more basic spending patterns simply because demanding work schedules leave little room for leisure, learning or family activities.

From this perspective, policies that protect rest time and vacation rights are not merely social policies. They are also economic policies.

By ensuring that workers can actually take leave, spend time with family, travel or invest in personal development, these measures help unlock demand that already exists but has been suppressed by time constraints.

This approach also reflects a broader shift in China’s development philosophy. The government work report emphasizes “the well-rounded personal development” as an important dimension of Chinese modernization. Economic progress is no longer defined solely by output growth, but also by improvements in quality of life and human development.

In this sense, encouraging a healthier balance between work and life is not only about well-being. It may also become an important driver of the next stage of consumption growth.

After all, consumption ultimately depends on a simple condition: people must have both the means — and the time — to enjoy it.

Yu Chunhai, executive dean of School of Economics at Renmin University of China.