Chinese Premier Li Qiang unveiled Beijing’s economic priorities for the year during the annual government work report at the National People’s Congress, setting the country’s GDP growth target at 4.5% to 5%. The range represents a slight step down from the “around 5%” goal used in the past three years.
The introduction of a target range rather than a single figure signals a more flexible policy approach. By allowing growth to fluctuate between 4.5% and 5%, policymakers are granting themselves greater room to manage domestic challenges without the pressure of hitting a rigid numerical target.
Those challenges remain significant. China’s economy continues to grapple with a prolonged property sector downturn, persistent industrial overcapacity, and uneven domestic demand. Against that backdrop, the leadership appears increasingly focused on stability rather than aggressive expansion.
The new target also highlights Beijing’s strategic shift toward “high-quality” growth. Instead of pursuing rapid expansion through debt-fueled infrastructure or property stimulus, policymakers are emphasizing technology development, advanced manufacturing, and consumption as the core engines of growth.
Other policy targets announced in the report reinforce this balanced approach. Inflation is projected to run around 2%, reflecting authorities’ efforts to guard against deflation risks. The unemployment rate is expected to remain below 5.5%, while the fiscal deficit is set at 4% of GDP, suggesting a somewhat more proactive fiscal stance to support economic activity.
Despite the significance of the policy signals, market reaction was relatively muted. Hong Kong equities showed little immediate response to the announcement, with trading largely influenced by global risk sentiment rather than domestic policy developments. The rebound in the Hang Seng Index during the session appeared to follow the stabilization seen in US markets overnight after the steep selloff earlier in the week triggered by escalating tensions in the Middle East.
Technically, however, risks of a deeper medium-term correction in Hong Kong equities are building. The HSI recently faced rejection near the 28,000 resistance zone, where a multi-year downtrend line converges with a 161.8% projection level near 161.8% projection of 14,597 to 22,700 from 14,794, at 27905.
The index is currently attempting to hold support around the rising channel floor and the 55 W EMA near 24,738. However, decisive break below that region could open the way for a pullback to 38.2% retracement of 14,7946 to 28,056 at 22,990 at least.
