China has set a GDP growth target of 4.5-5 percent for 2026, a range economists say signals a more flexible policy stance that can stabilize market expectations while giving policymakers greater room to fine-tune macro measures to sustain stable growth and advance higher-quality development.

Compared with the government work reports from 2023 to 2025, the 2026 report reflects a more flexible and forward-looking approach to macroeconomic regulation in the way the growth target is set, said Cheng Shi, chief economist at ICBC International Holdings Ltd.

"A target range not only reflects confidence in China's economic growth potential, but also enhances policy flexibility and adaptability amid a complex external environment, creating more favorable conditions for structural adjustment, risk prevention and reform," Cheng said in a research note.

"At the same time, the report explicitly states that the country will strive for better GDP growth in practice, continuing the policy tone of pursuing progress while maintaining stability and further reinforcing the orientation toward proactive policy moves," he added.

Under the policy framework aimed at expanding domestic demand, the 2026 government work report also strengthens the policy mix of coordinated efforts in consumption and investment.

"As consumption policies continue to gain traction and the investment structure keeps improving, the domestic demand system is forming a more solid foundation for growth," said Cheng. "The release of consumption potential and improvements in investment quality will reinforce each other, further strengthening domestic demand as a key driver of economic growth and steadily consolidating the endogenous growth foundation of the Chinese economy."

It is worth noting that the government once again reiterated its long-term goal of doubling per capita GDP by 2035 from the 2020 level. This requires China's annual GDP growth rate to average 4.2 percent over the next decade, said Xiong Yi, chief economist for Greater China at Deutsche Bank.

The country has slightly lowered its GDP growth target for 2026 to a range of 4.5-5 percent, with the government saying the proposed adjustment is intended to leave room for structural adjustment, risk prevention, and reform in the opening year of the 15th Five-Year Plan period (2026-30), laying a solid foundation for better performance in the coming years.

"Based on this, we judge that 4.5 percent may become the anchor for China's growth targets over the next five years," Xiong said.

He also noted that service consumption is increasingly replacing goods consumption as the focus for boosting domestic demand. To spur spending, the government is expected to adopt a series of measures such as interest rate subsidies, consumer vouchers, deregulation, increased holidays, and more cultural and tourism events, all aimed at driving foot traffic and service consumption.

These measures are also expected to support job creation in the service sector, he added.

Meanwhile, the government work report sends clear policy signals supporting technological self-reliance and innovation, emerging and future industries, digitalization and smart economy, and artificial intelligence related investment and application, said Song Yu, chief China economist at UBS Securities.

"We expect nationwide R&D spending to grow strongly at a compound annual growth rate of 10 percent during 2026-30, versus the target of at least 7 percent," Song said.