External challenges are causing the economy of the largest country to slow down.
The Chinese government has set a GDP growth target for 2026 in the range of 4.5% to 5%. This is the lowest figure since 1991, according to CNN and BBC News.
For the past three years, Chinese authorities have aimed for economic growth of around 5%. In 2020, no target was set due to the pandemic.
"For many years, we have rarely faced such a serious and complex situation, where external shocks and challenges intertwined with internal difficulties and tough political decisions," said Premier of the State Council of China Li Qiang at the opening of the session of the National People's Congress. He acknowledged that the country's economy is still under "deeply rooted structural problems," but at the same time has "demonstrated remarkable resilience" over the past year.
Beijing is seeking to restructure its economy amid internal issues such as weak consumption, a declining population, a real estate market crisis, as well as external instability caused by trade tensions with the U.S. and an energy crisis due to the war in Iran, notes BBC News.
Li Qiang announced that China's economic development plan until 2030 will include investments in innovation, high-tech industries, scientific research, and additional efforts to stimulate household consumption. Over the next five years, the government intends to implement more than 100 major projects in the fields of science and technology, transportation, and energy to expand China's industrial potential.
Economic reforms launched in the late 1970s provided China with double-digit growth for nearly three decades. In 2010, China surpassed Japan to become the world's second-largest economy. However, in the last decade, growth rates have slowed, and the economic situation has worsened due to strict measures taken by authorities to combat the pandemic, explains CNN.
Investments in housing construction, manufacturing, and infrastructure—the main driving forces of China's economic growth—showed a decline last year. The crisis in the real estate sector has continued for the fifth year, hampering the economy and reducing consumer confidence, notes the channel.
