China’s “two sessions” this year presents less of a story of an economic miracle than of transition: from high-speed to high-quality growth, and from dependence on external demand to a more resilient, innovation-driven economy.

Against a backdrop of global tensions and fragmenting supply chains, Beijing is using this political moment to signal that it sees opportunity in adversity and is prepared to recalibrate its development model rather than cling to the habits of the boom years.

For China, the key question is no longer whether it can hit a headline growth number for a single year, but whether it can reshape the foundations of its economy in a way that is robust to shocks from geopolitics, demographics, finance and climate. Premier Li Qiang’s government work report on Thursday offers a window into how the leadership intends to answer that question. What emerges is a cautiously optimistic vision of slower, steadier growth powered more by chips, data and domestic demand.

The 2026 growth target of 4.5 to 5 per cent is not an admission of weakness; it is a marker of economic maturity. Moving away from “growth at all costs” suggests a greater focus on better allocation of capital, improved environmental outcomes and more attention to financial stability.

One of the most encouraging aspects of this year’s agenda is the continued emphasis on innovation and technological upgrading as central pillars of China’s long-term strategy. The subtext is clear: the days when China could grow by simply adding more labour and capital to low-tech factories are over. Future gains will come from doing more with less and doing it at the frontier.

In practice, this means elevating research and development (R&D) from a supporting role to centre stage. Increased R&D spending, greater emphasis on basic science and support for strategic sectors are all part of the package.