China's largely ceremonial legislature convened Thursday in Beijing for its annual session, with Premier Li Qiang announcing an economic growth target of 4.5% to 5% for the year, down from the actual 5% growth achieved in 2025.

The National People's Congress, comprising nearly 3,000 members, opened its session where Li delivered a 35-page report outlining the government's economic priorities. The new growth target range provides more flexibility for policymakers as they navigate what Li described as "difficulties and challenges" facing the economy.

China's economy continues to face headwinds from a prolonged property slump, high youth unemployment, and weak domestic consumption. The report acknowledged an "acute" imbalance between strong supply and weak demand, while also noting external pressures from trade tensions and geopolitical risks affecting global supply chains.

The annual legislative meeting, known as the Two Sessions when combined with the advisory Chinese People's Political Consultative Conference, will also endorse a five-year plan setting policy priorities through 2030. The government indicated it would continue supporting domestic demand without launching major new stimulus measures.

In the draft budget presented, defense spending increases were trimmed to 7% annually, down from 7.2% in the previous year. The legislature, which historically approves government proposals with near-unanimous votes, is expected to formally endorse the annual report and budget at its closing session next week.

The meetings occur as Chinese leaders attempt to balance reviving economic growth through increased domestic spending while pursuing President Xi Jinping's goals of advancing China's capabilities in artificial intelligence, robotics, and other advanced technologies.