by ZHANG Yinuo
China will convene its annual "two sessions," the meetings of its national legislature and top political advisory body, on March 4 and 5, when policymakers are expected to announce a 2026 growth target and set the policy direction for the 2026–2030 Five-Year Plan.
The Government Work Report, due on March 5, will detail those priorities, with the full five-year plan expected to be released shortly after the meetings conclude, analysts said.
Economists interviewed by Jiemian News expect the national growth goal to be set slightly below the roughly 5% average target adopted by provincial governments.
Data from 31 provincial-level regions show local targets clustering around 5%, down from last year's "above 5%" language. Historically, provincial targets have tended to exceed the national goal.
JIN Xiaowen, chief macro analyst at SPDB International, said a 4.5%–5.0% range would help stabilize employment while leaving room for structural reforms.
ZHANG Di, chief macro analyst at China Galaxy Securities, said any adjustment to the growth target should not be seen as scaling back policy ambitions, adding that the focus remains on improving growth quality, boosting indigenous innovation and expanding domestic demand, particularly in services.
Deficit ratio seen steady near 4%
Fiscal policy is expected to remain supportive. Analysts anticipate the headline budget deficit ratio will stay near 4%, broadly unchanged from last year, in line with December's pledge for a "more active" fiscal stance.
New local government special bond issuance may match or slightly exceed last year's 4.4 trillion yuan (US$640 billion). Broader fiscal measures, including ultra-long special treasury bonds, are expected to continue supporting equipment upgrades and consumer trade-in programs.
Jin estimated initial ultra-long special bond support this year at about 250 billion yuan, versus 300 billion yuan last year, though additional funding could be deployed if needed.
Room for further monetary easing
Monetary policy is also expected to stay accommodative. In 2025, the People's Bank of China cut its policy rate by 10 basis points and lowered banks' reserve requirement ratio (RRR) by 50 basis points.
Analysts expect further easing in 2026, with cumulative rate cuts of 10–20 basis points and RRR reductions of 50–100 basis points possible, depending on growth and inflation trends.
Zhang said monetary policy may become more data-driven while coordinating closely with fiscal expansion.
AI and technology push to remain central
Technology and industrial upgrading are expected to take center stage as Beijing promotes "new quality productive forces," its policy framework aimed at advancing artificial intelligence, high-end manufacturing and other strategic emerging industries.
The Central Economic Work Conference called for deeper integration of technological and industrial innovation and expansion of the "AI+" initiative. Provincial governments have similarly flagged artificial intelligence as a priority.
China's R&D spending reached 2.8% of GDP in 2025, surpassing the OECD average for the first time, according to official data.
