China Plans More Proactive Economic Policies in 2026 as Growth Holds Near 5%
Chinese President Xi Jinping. (File Photo: Reuters via the Hindu)
Beijing: China will implement more proactive economic policies in 2026 to support long-term growth, with the world’s second-largest economy expected to meet its official growth target of around 5% in 2025, President Xi Jinping said on Wednesday, December 31, according to state media.
Addressing a New Year’s tea party attended by senior Communist Party officials, Mr. Xi said China’s economy was expected to expand to about 140 trillion yuan, or roughly $20 trillion, by the end of 2025. State broadcaster CCTV quoted him as saying that the economy had continued to move forward “under pressure,” while showing resilience and vitality.
Mr. Xi said the government would focus on achieving “effective qualitative improvement and reasonable quantitative growth,” while maintaining social harmony and stability. His remarks come amid concerns over slowing momentum toward the end of the year, driven by weak household consumption, deflationary pressures and a prolonged crisis in the property sector.
Despite these headwinds, Beijing remains confident of meeting its growth target. The leadership has reiterated its commitment to policies aimed at boosting incomes, supporting consumption and encouraging investment. As part of these efforts, the central government has allocated 62.5 billion yuan from special treasury bond proceeds to local governments to fund a consumer goods trade-in scheme next year, signalling continued support for household demand.
China’s state planner has also released early investment plans for 2026, including two major construction projects backed by about 295 billion yuan in central budget funding. These projects are expected to play a key role in stabilising investment and sustaining economic activity.
The policy signals suggest Beijing is preparing to rely on a mix of fiscal support and targeted investment to navigate ongoing structural challenges.
Our Final Thoughts
China’s plans for more proactive policies in 2026 highlight its determination to stabilise growth amid structural pressures. While near-term targets appear within reach, sustaining momentum will depend on reviving consumption and resolving deeper property-sector stresses.