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China targets quality growth in 2026 and beyond amid weakening global economy

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China targets quality growth in 2026 and beyond amid weakening global economy
Blog

Blog

China targets quality growth in 2026 and beyond amid weakening global economy

2026-03-06 15:06 Last Updated At:15:06

China's economic growth target for 2026 is proactive and pragmatic, reflecting a broad assessment of domestic conditions and shifts in the external environment.

The 15th Five-Year Plan marks a pivotal stretch in China's modernization drive, and its ambitions reach well beyond domestic growth metrics. By directing capital into frontier technologies, deepening trade and investment linkages, and advancing green development, the blueprint is poised to affect the global economy across multiple dimensions, from the tempo of the energy transition to the landscape of advanced manufacturing worldwide.

For a global economy straining under the weight of trade tensions, geopolitical fragmentation and weak growth, China's dual pledges -- to sustain its own steady expansion and to open its vast market further to the world -- offer a rare note of predictability.

China on Thursday set an economic growth target of 4.5 to 5 percent for 2026, aiming for a good start to the new five-year plan that charts the course for high-quality development and offers much-needed certainty to a troubled world economy.

The GDP growth target is well aligned with China's long-range objectives through the year 2035 and broadly in line with the long-term growth potential of China's economy, said a government work report submitted to the country's top legislature for deliberation.

China's economic growth target for 2026 is proactive and pragmatic, reflecting a broad assessment of domestic conditions and shifts in the external environment, said Shen Danyang, head of the group responsible for drafting this year's government work report.

The projected pace would also be among the highest for major economies globally, Shen said.

"The signal this target sends to the international community is clear that China is no longer pursuing growth speed alone," said Zhang Ying, associate dean of the Guanghua School of Management at Peking University, in an interview with Xinhua. "This year's target reflects China's firm commitment to high-quality development."

The country has made it clear that it will strive for better in practice regarding this year's growth target, and favorable conditions for achieving this target are in place, according to the report.

The government work report outlined this year's major tasks, including building a robust domestic market, fostering new growth drivers at a faster pace, and moving faster to achieve greater self-reliance and strength in science and technology.

To achieve these goals, China will continue to implement a more proactive fiscal policy and apply an appropriately accommodative monetary policy. The orientations highlight policy continuity and offer further assurance to a global economy unnerved by trade and geopolitical tensions.

China's global economic heft means its policy moves are pivotal to the world economy. Over the 14th Five-Year Plan period (2021-2025), China saw its economy grow at an average annual pace of 5.4 percent, well above the global average, and contributed around 30 percent of global growth.

The country has remained the world's second-largest importer for 16 consecutive years, has cemented its position as the world's largest trader of goods, and has become a major trading partner of more than 160 countries and regions.

The weight of the role is only set to grow. According to a World Bank forecast, global growth is projected to ease to 2.6 percent in 2026. If the forecast holds, the 2020s are on track to be the weakest decade for global growth since the 1960s.

"What we achieved in 2025 was indeed hard won," according to the government work report. "Rarely in many years have we encountered such a grave and complex landscape, where external shocks and challenges were intertwined with domestic difficulties and tough policy choices."

In a sign of assurance to the troubled global economy in the longer term, China on Thursday unveiled a slew of development priorities for the 15th Five-Year Plan period (2026-2030).

The 15th Five-Year Plan sets a clear anchor: doubling China's 2020 per capita GDP by 2035 to reach the level of a moderately developed country. Getting there will require navigating a middle stretch that China has chosen not to over-prescribe, as annual growth targets will be set year by year, a flexibility that reflects both confidence in the trajectory and awareness of the uncertainties ahead.

The 15th Five-Year Plan marks a pivotal stretch in China's modernization drive, and its ambitions reach well beyond domestic growth metrics. By directing capital into frontier technologies, deepening trade and investment linkages, and advancing green development, the blueprint is poised to affect the global economy across multiple dimensions, from the tempo of the energy transition to the landscape of advanced manufacturing worldwide.

Simon Smith, director and general manager of Taikoo Engine Services (Xiamen) Co., Ltd., an engineering branch of the multinational company Swire Group, said long-term policy clarity changes the calculus for multinationals operating in China.

"The five-year plan transforms investment decisions from probabilistic bets to calculated strategic positioning," Smith told Xinhua in an interview. "Without the plan, the company may hesitate on a specific capability expansion or investment, uncertain whether regulatory support, skilled labor availability, or customer demand will materialize."

That strategic positioning comes with a concrete roadmap. According to China's technology agenda, the country will nurture emerging industries and industries of the future. During the 2026-2030 period, China will foster new drivers of economic growth such as quantum technology, biomanufacturing, hydrogen and nuclear fusion power, brain-computer interfaces, embodied artificial intelligence, and 6G mobile communications.

Hu Jinbo, a national political advisor and head of the Shanghai Institute of Organic Chemistry, said the next five years represent a critical window for China's economic transition from high-speed growth to high-quality development, and sci-tech innovation will serve as the core engine of this transformation.

As China continues to achieve sci-tech innovation breakthroughs, developing countries can draw on China's experience to accelerate their own industrialization, while developed countries will also gain broader opportunities for collaboration in advanced manufacturing and frontier technologies, Hu said.

For the rest of the world, what may matter most in the longer run is not the pace of growth, but its composition. China has set an explicit goal of raising household consumption as a share of GDP over the next five years.

For a global economy straining under the weight of trade tensions, geopolitical fragmentation and weak growth, China's dual pledges -- to sustain its own steady expansion and to open its vast market further to the world -- offer a rare note of predictability.

A more balanced Chinese economy underpinned by stronger domestic demand would generate far-reaching spillover effects globally, according to a recent Bloomberg article citing Robin Xing, chief China economist at Morgan Stanley.

"Chinese and foreign companies alike would benefit from the depth and scale of the China market, which would help cushion today's geopolitical challenges," Xing was quoted as saying.

According to the government work report, China will deepen reform of the institutional framework for promoting foreign investment this year. It will open wider to the outside world, with efforts to expand market access and open up more areas, particularly in the service sector.

Zhang Ying highlighted three aspects of China's opportunities for global investors: a massive unified market with rising purchasing power of residents, highly efficient and cost-effective supply chains, and an increasingly open, pro-investment regulatory environment.

"Against a backdrop of global volatility and macroeconomic headwinds, these fundamentals offer significant appeal to international investors and corporations," Zhang said.




InsightSpeak

** 博客文章文責自負,不代表本公司立場 **

On October 14, the Chinese aircraft carrier Liaoning led its group through the Miyako Strait into the Western Pacific Ocean for far-sea training.

That same day, the Joint Staff Office of Japan's Ministry of Defense released its regular update on PLA ship and aircraft movements. The photos showed more than the carrier and its escorts. A large drone cruised at high altitude, its long, slender wings upturned at the tips. That was the WZ-7.
 
A Flyby That Says Plenty
The F-15J fighters dispatched by the Japan Air Self-Defense Force tailed it the whole way. From far below, they trained their cameras on it.

Japanese F-15Js shadowed the WZ-7, cameras aimed up.

Japanese F-15Js shadowed the WZ-7, cameras aimed up.

 
These photos say plenty on their own. Japan has long relied on close-range visual observation to track PLA ships and aircraft moving in and out of the First Island Chain. The images are usually sharp enough to count the carrier aircraft on deck and read the hull numbers.
 
Not this time. What the F-15J caught was the WZ-7 as a distant silhouette high in the frame, clear in outline but far away. The camera could reach it only thanks to a telephoto lens and an upward shooting angle. The fighter itself could never climb to that altitude.
 
Out of Reach
The WZ-7 cruises at around 18,000 meters, can climb to roughly 20,000 meters when it needs to, and flies at more than 750 kilometers per hour, according to public information. That puts it beyond the effective operating range of conventional fighter jets.
 
Its joined-wing layout, with fore and aft wings staggered and connected, squeezes maximum lift and range out of a limited wingspan. That lets the drone loiter at altitude for more than ten hours. Its job is not to charge into a combat zone and open fire, but to watch from a safe height and record everything moving on the sea and in the air.
 
The F-15J's problem runs deeper than simply not reaching 20,000 meters. On paper, the fighter's maximum ceiling is close to 19,000 meters, but that figure assumes an empty load, light fuel and ideal weather. A real combat sortie means hauling external fuel tanks and air-to-air missiles. The added weight drags the usable ceiling down.
 
Up high, the air is thin. Holding speed means keeping the afterburner lit for long stretches, fuel burn multiplies, and the tanks empty fast. Japanese pilots have said in interviews that when tracking the WZ-7, they mostly operate at around 15,000 meters. To get a clear look at the target above, the rear-seat weapons systems officer has to point a camera straight up.

WZ-7 has appeared near the First Island Chain before.

WZ-7 has appeared near the First Island Chain before.


 
In other words, even if an F-15J claws its way to its maximum altitude, the fuel and time left over are not enough for any kind of response. It has no margin to intercept and no margin to escort and drive the drone off. All it can do is snap a photo from afar and leave it at that.
 
Those photos are showing up in Japan's Ministry of Defense reports more and more often. They have almost become a fixed image.
 
Running on Empty
Tokyo knows the problem well. In recent years, the Air Self-Defense Force has repeatedly rewritten its interception rules, cutting back on emergency scrambles against aircraft of unknown nationality and saving its limited F-15J fleet for the missions that matter most.
 
The fleet itself is wearing out. Aging airframes, scarce spare parts and rising maintenance hours all stack up, and the number of jets ready to fly keeps shrinking.
 
Japan is pushing ahead with F-15J modernization, aiming to fit new active electronically scanned array radars and long-range missiles, and it is gradually bringing in the F-35. But re-equipping takes time, upgrade slots are limited, and none of it solves the near-term problem of tracking a high-altitude reconnaissance target.
 
The WZ-7 is no stranger to the First Island Chain. The Air Self-Defense Force has spotted it over the East China Sea and around the Miyako Strait several times before, but Japanese notices back then usually said only "presumed to be a Chinese unmanned aircraft" without confirming the model.
 
That changed on September 27 this year, when the Southern Theater Command organized a joint sea-and-air exercise around Scarborough Shoal. A CCTV Military report explicitly said the WZ-7 and the KJ-500 took part. It was the first time official media confirmed the drone had joined a theater-level joint exercise.
 
From the South China Sea to the East China Sea, this aircraft is becoming a routine sight.
 
A System, Not a Plane
The same thinking shows up across the rest of the fleet. The KJ-500 pulls sea and air targets into a single situational picture, then pushes it out over data links to ships, aircraft, and shore-based command posts.
 
The division of labor is clear. Unmanned reconnaissance aircraft see far and see long, airborne early warning aircraft gather and distribute the information, and surface vessels handle the response. This chain runs smoothly only because of years spent building communications and data links. Take one platform out of the system, and even the most advanced hardware accomplishes little on its own.

Japan photographed the WZ-7 shows the drone has entered the category of things that must be tracked and recorded.

Japan photographed the WZ-7 shows the drone has entered the category of things that must be tracked and recorded.


 
Seen this way, the scene over the Miyako Strait was less a victory for any single piece of equipment than a shift in how reconnaissance gets done. In the past, Japan used its geographic edge and a dense network of bases along the First Island Chain corridors to watch PLA movements in and out at close range, continuously, and with a fairly clear picture.
 
Now the PLA has pushed its reconnaissance platforms to high altitude and distant seas. Observation no longer comes from just one direction, and the two sides' situational awareness is moving toward parity. The very fact that Japan photographed the WZ-7 shows the drone has entered the category of things that must be recorded and answered.
 
One detail is easy to miss. The WZ-7's airframe carries low-observable coatings, and it is smaller than a manned fighter, so its radar cross-section is modest. That compresses the distance at which Japanese radars can pick it up and sharply degrades the continuity of tracking.
 
What the Air Self-Defense Force sees may not be the whole picture, and what its notices release may not be the full story. That kind of incomplete information works against Tokyo when it tries to judge the intensity and rhythm of the other side's reconnaissance.
 
The New Normal
Looked at this way, a single low-angle photograph can only say so much. But the trend it captures is unmistakable.
 
The information asymmetry in the First Island Chain passages is being erased, bit by bit. Reaching 20,000 meters is just a technical detail. What really changes the game is the system behind the aircraft, one that links land-based, maritime and aerial reconnaissance and command assets into a single web.
 
Japan will keep taking pictures, and those pictures will keep getting published. But what they record is no longer what it was twenty years ago.