Economic Growth Target - China set its GDP growth target for 2026 at 4.5% to 5%, marking the lowest target on record, as the country faces persistent deflationary pressures and trade tensions with the U.S. [1] - This target represents a downgrade from the previous "around 5%" set in the last three years, and is the most modest goal since 2020 when no target was set due to the pandemic [2]. Budget Deficit and Inflation Targets - The budget deficit target remains unchanged at "around 4%" of GDP, consistent with last year's target, which is the highest on record since 2010 [2][3]. - The annual consumer inflation target is set at "around 2%", the lowest level in over two decades, indicating a recognition of weak domestic demand [3]. Economic Performance Indicators - In 2025, China's economy expanded by 5%, but the country has entered a fourth year of deflation, influenced by a real estate slump, weak consumer confidence, and local government debt stress [5]. - Retail sales increased by 3.6% in 2025, while factory-gate deflation deepened, falling by 2.6% year-on-year [5]. - Fixed-asset investment declined by 3.8% last year, marking the first annual decline in decades, with real estate investment plunging by 17.2% [6].