"14th Five-Year Plan" Starts with Development: Five Key Highlights from the National Two Sessions

The 2026 National Two Sessions are about to begin. This year marks the start of the “14th Five-Year Plan,” which is crucial not only for the present but also for the economic and social development over the next five years. Focusing on this key year, planning strategic measures, what are the key highlights related to economic development that we can look forward to at this year’s Two Sessions?

Highlight 1:

How to Set Economic and Social Development Goals

The main objectives for economic and social development are always the focus of the annual Two Sessions, especially targets like GDP, CPI, and employment.

By 2025, China’s GDP is expected to grow by 5% year-on-year, with the total economic output surpassing 140 trillion yuan for the first time, successfully achieving the planned goals and maintaining a leading position among major global economies.

How will this year’s growth target be set? According to government work reports from various regions, many will aim for about 5% growth in regional GDP.

“This year, the national economic growth rate will remain stable, with major economic provinces playing a stabilizing role. The overall goal will focus more on quality rather than quantity of growth,” said Ming Ming, Chief Economist at CITIC Securities, in an interview with Shanghai Securities News.

Luo Zhiheng, Chief Economist at Yuekai Securities, told Shanghai Securities News that a certain level of economic growth is beneficial for stabilizing expectations, ensuring stable employment and capital markets, and promoting a smooth transition of new and old growth drivers. The GDP growth target for this year is likely to remain around 5%.

Regarding inflation, most research institutions expect the CPI target to stay anchored at around 2%. The market generally anticipates moderate price increases and improved corporate profits this year.

Additionally, the main goals for economic and social development during the “14th Five-Year Plan” period will be further detailed, focusing on achieving significant results in high-quality development, greatly improving technological independence, and other key indicators.

Highlight 2:

How Can Macro Policies Be More Proactive and Effective?

The Central Economic Work Conference held at the end of last year set the tone for this year’s macro policies—being more proactive and effective, emphasizing “stability with progress, quality, and efficiency.” This is expected to be one of the key topics at this year’s Two Sessions.

Zhang Lianqi, Standing Committee Member of the Chinese People’s Political Consultative Conference and President of the China Enterprise Financial Management Association, told Shanghai Securities News that macro policies this year need to balance “expansion” with “precision.” Fiscal policy will activate domestic demand through structural tools, monetary policy will reduce financing costs via market-oriented measures, and investment strategies will strengthen development foundations through coordinated efforts in “goods” and “people.” The core drivers of economic growth will be new productive forces, consumption upgrades, and regional coordinated development, pushing China’s economy toward high-quality growth.

Since the beginning of this year, proactive fiscal policies have been implemented early. Local governments have issued a large volume of government bonds to fund major projects, stabilizing investment and the economy while preventing risks. Meanwhile, the People’s Bank of China has introduced structural interest rate cuts and other policies to further enhance “quantity, price, and efficiency” of monetary tools, supporting agriculture, small businesses, technological innovation, green development, and elderly care.

“Fiscal expenditure this year emphasizes ‘investment in people’ by increasing social welfare spending to indirectly boost consumption. Monetary policy will continue to be moderately relaxed, combining counter-cyclical and cross-cyclical adjustments, with interest rate and reserve requirement ratio cuts likely to be similar to 2025. The combined efforts of fiscal and monetary policies are expected to further expand domestic demand,” said Zhang Yi, Chief Economist at Financial Street Securities.

Highlight 3:

What Are the Key Measures to Expand Domestic Demand?

The Central Economic Work Conference listed “insisting on domestic demand-led growth and building a strong domestic market” as this year’s top economic priority, which is expected to be a focus at the Two Sessions. Experts interviewed say that policies to expand domestic demand will continue to be strengthened this year.

Income growth is a key word for boosting consumption this year. Recently, a relevant official from the National Development and Reform Commission revealed that efforts are underway to develop plans for stabilizing employment, expanding and improving quality, and increasing income for urban and rural residents to enhance their consumption capacity and optimize supply.

Currently, service consumption is growing rapidly. Ming Ming noted that service consumption will be an important focus for expanding domestic demand this year, likely showing overall growth and structural improvements. Policies could support offline commercial infrastructure updates, smart renovations, and the expansion of smart home and elderly-friendly products, providing long-term support for service supply and upgrading the consumption structure.

Measures to stabilize investment are also expected to be intensified.

“Many regions emphasize optimizing investment structure, increasing the proportion of government investment in livelihood projects, and boosting shortfalls in areas like preschool education, healthcare, elderly care, cultural and sports facilities, and tourism. This will help achieve a virtuous cycle of expanding investment, upgrading consumption, and improving human capital,” said Wang Yiming, Vice President of the China Center for International Economic Exchanges.

Highlight 4:

Where Is the Focus for Developing New-Quality Productivity?

Developing new-quality productivity, deepening integration of technological innovation and industrial innovation, will also be a key topic for deputies and members at this year’s Two Sessions.

Zhang Jun, Chief Economist at China Galaxy Securities, told Shanghai Securities News that this year, developing new drivers like artificial intelligence and modern industrial systems will be prioritized. As the importance of “AI+” continues to grow, related policies will strengthen regional collaborative innovation and industrial clustering.

The direction for developing new-quality productivity is industrial upgrading. Strategic emerging industries and future industries may see more supportive policies.

Since the beginning of this year, many regions have made plans to cultivate emerging and future industries. Guangdong aims to expand new energy and new materials, cultivating new pillar industries; Zhejiang promotes AI innovation, especially opening up scene resources and large-scale applications.

Zhang Yi believes that the focus should be on key sectors like AI, advanced manufacturing, and future industries, strengthening original innovation and tackling core technologies. This involves creating a full chain from basic research to technical breakthroughs, pilot testing, industry clustering, and financial support, fostering deep integration of innovation chains, industrial chains, capital chains, and talent chains, and continuously nurturing leading tech enterprises to generate new growth momentum.

Highlight 5:

How Will Key Sector Reforms Be Promoted?

Accelerating the construction of a unified national market, promoting private sector development, advancing fiscal and tax system reforms, and deepening comprehensive reforms in capital markets will be hot topics at this year’s Two Sessions.

Liu Tao, Deputy Director of the Market Economy Research Institute at the Development Research Center of the State Council, said that during the 14th Five-Year Plan period, to better unleash market potential and improve resource allocation efficiency, efforts should be made to break down local protectionism and market segmentation, establish sound institutional rules and standards, and advance the building of an efficient, standardized, fair, and fully open national unified market.

Wang Renfei, Director of the Institutional Reform Department at the National Development and Reform Commission, previously stated at a State Council Information Office briefing that they will study and formulate regulations for the construction of a unified national market, develop a list of issues hindering its development, and improve statistical, fiscal, and assessment systems to solidify the institutional foundation.

Reforms in fiscal and tax systems will also continue in 2026. Luo Zhiheng suggests moderately increasing local fiscal autonomy, optimizing the division of responsibilities between central and local governments, and shifting some expenditure responsibilities to the central government to strengthen its role in building the unified market. Tax sharing principles may be reformed, moving from production-based to consumption-based sharing, or adopting a combined approach.

Further deepening of comprehensive reforms in capital market financing and investment is also planned. A recent meeting of the China Securities Regulatory Commission emphasized using reforms of the STAR Market and ChiNext to deepen investment and financing reforms, improve the system, products, and services of capital markets.

Zhang Yi believes that this year, key focus areas should include supporting tech innovation companies’ listings and financing, encouraging long-term funds to enter the market, improving the quality of listed companies, and enhancing shareholder return mechanisms.