The “Two Sessions” and growth expectations for 2026

CHINA FINANCIAL - Report 10 Mar 2026 by Michael Pettis

Special points to highlight in this report:

- During this week’s Two Sessions meetings, Premier Li Qiang announced that China’s GDP growth target in 2026 would be 4.5% to 5.0%. Several economists (including myself) would have preferred a much lower, more sustainable target, but I don’t think anyone thought that a number below 4.5% would be politically acceptable. In that sense we got the best outcome we could have hoped for.

- In the same meeting Beijing repeated its determination to raise consumption as a more important driver of overall growth in the Chinese economy. None of the policy proposals, however, were new or indicated a deeper understanding of why it has been so difficult to rebalance the economy or rein in debt, nor how these goals are completely inconsistent and counter to its manufacturing and investment goals.

- Beijing will continue to emphasize this year the development of “new growth drivers”, i.e., high technology sectors including integrated circuits, aerospace, and biomedicine.

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