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Two Sessions 2026
EconomyChina Economy

China’s pivot from GDP obsession sparks cadre confusion, testing local governance

Governors and mayors must reconcile Beijing’s people-centric mandates with traditional growth targets, navigating vague appraisal changes and performance concepts

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A vendor sits at the doorway to her store in Beijing on February 18. China’s leadership is pivoting towards people-centric, consumption-led economic growth. Photo: Getty Images
Frank Chenin Shanghai
Ahead of China’s annual legislative meetings – typically a window into Beijing’s top-level policy agenda – this is the second entry in a series examining the complex economic recalibration driving China’s growth philosophy and its wide-ranging implications for local governments, financial investors and private enterprises.

Beijing’s campaign to purge the bureaucracy of a growth-at-all-costs mindset has caught some local officials off guard, triggering a mix of confusion and contradictory messaging as provinces saddle up for their first policy meetings in the Year of the Horse.

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Many provincial leaders are playing it safe by echoing central government slogans, highlighting improvements to the business environment and doubling down on tech-innovation efforts. However, abandoning the decades-old economic yardstick has raised significant questions among local authorities about how this shift could rewrite interprovincial competition and reshape the country’s economic landscape, according to analysts.

“There is confusion because, while underlining the need to benefit the people, Beijing has stopped short of explaining how economic growth appraisal will be overhauled,” said Tang Dajie, a senior researcher at the China Enterprise Institute think tank.

Under the new directive, initiated on Monday, Communist Party members across the country, particularly senior government officials, have been ordered to heed Beijing’s call to eliminate deviations in their understanding of what constitutes good performance.

Officials have been told to prioritise social welfare and long-term sustainability over economic expansion, with debt, fraud and vanity projects squarely in the crosshairs of what is said to be a five-month campaign.

Officials in key powerhouse regions, including Shanghai and the provinces of Jiangsu and Zhejiang, have been quick to use their first meetings since returning to work after a long Chinese New Year holiday to disseminate Beijing’s directives through the party ranks.
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While many officials have attached greater significance to people’s well-being in work plans, some provincial governors and mayors continue to mention gross domestic product and the revival of infrastructure investment to keep the economic gears churning.

Headline GDP growth remains a hard … metric, while ‘benefiting the people’ is [vague]
Tang Dajie, China Enterprise Institute

In eastern China’s Zhejiang, residents’ income growth and public service quality will carry more weight during the province’s appraisal of officials, according to a Zhejiang Daily report. Still, some mayors have vowed to ensure that local GDP growth outpaces the national average this year, and some cities still plan to launch new infrastructure projects.

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‘Two sessions’: China’s economic agenda
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