China set its economic growth target for 2026 at 4.5%-5%, a downgrade from the 5% pace achieved last year, reports Reuters, which says the target leaves room for greater, albeit not decisive, efforts to curb industrial overcapacity and rebalance the economy.
China also released its 15th five-year plan, and as widely expected, pledged investments in innovation, high-tech industries, scientific research and a “notable”—but unspecified—increase in household consumption as a share of economic output.
In terms of stimulus, China plans a budget deficit of 4.0% of GDP, similar to last year. It set unchanged special debt issuance quotas for the central government of RMB 1.3 trillion ($188.49 billion) and for local governments at RMB 4.4 trillion. China pledged to raise minimum monthly pensions by RMB 20 per person and basic medical insurance subsidies for rural, non-working people by RMB 24. It said it wants to increase education spending, subsidise childcare and reform public hospitals.