China has pledged to build a robust domestic market to bolster its economy and counter external challenges, as it set out priorities for next year’s economic policy at the two-day annual Central Economic Work Conference (CEWC). In his speech to the Conference, President Xi Jinping reviewed the country's economic progress in 2025, analyzed the current economic situation, and laid out priorities for economic work in the next year. By setting a clear agenda for 2026, the Central Economic Work Conference aims to navigate China through its economic challenges while seizing opportunities for high-quality growth. While highlighting the need to continue to expand domestic demand, the conference urged efforts to advance the construction of a unified national market in greater depth and develop new quality productive forces tailored to local conditions to pro- mote “effective qualitative improvement” and “reasonable quantitative growth” in the country’s economy. Acknowledging that numerous long-standing issues and new challenges still remain in the country’s economic development, the conference noted the growing impact of changes in the external environment on the country’s economic growth, the prominent contradiction of strong supply and weak demand in the domestic market, and risks and hidden dangers in key areas. It emphasized the basic principle of “seeking progress while maintaining stability”.
The nation will continue exerting a more proactive fiscal policy and a moderately accommodative monetary policy next year, the statement said, adding that when formulating monetary policy, both promoting stable economic growth and allowing a reasonable rise in prices are important aspects that should be taken into consideration. Financial institutions will be guided to strengthen support for expanding domestic demand, technological innovation, and small and medium-sized enterprises, the statement said. China will maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, it added, as reported by the China Daily.
The Global Times adds that the CEWC offered the world an authoritative window to observe China. Since the beginning of this year, a growing consensus of “trust in China” is steadily taking shape and gaining momentum. In the first three quarters, the country's GDP grew by 5.2% year-on-year and the main targets for economic and social development are expected to be successfully achieved, reflecting the resilience and potential of the Chinese economy. Recently, multiple international institutions have raised the forecasts for China's economic growth in 2025. What the world is optimistic about is the development momentum and cooperative opportunities brought by China's economy, which possesses strong growth resilience. What the world is optimistic about is a China that continues to unleash its development potential. The Central Economic Work Conference emphasized maintaining domestic demand as the primary driver and building a robust domestic market. On the demand side, the country should deepen the implementation of targeted initiatives to boost consumption and formulate plans to increase the income of urban and rural residents. China is transforming the dividends of its opening-up into development opportunities for the world to share. The CEWC emphasized steadily enhancing institutional opening up, expanding voluntary opening-up in the services sector, optimizing the layout and scope of pilot free trade zones (FTZs), promoting integrated development of trade and investment and of domestic and foreign trade, and fostering high-quality Belt and Road cooperation, the Global Times reports.
The South China Morning Post noted that the CEWC concluded with a nationwide call to “strengthen our own capabilities to cope with external challenges”. “We must ensure that the market is allowed to operate freely while being well regulated, and must closely combine investment in physical capital with investment in people.” The Conference addressed a range of domestic challenges that the world’s second-largest economy is now facing, including a sharp contradiction between strong supply and weak demand, low price levels, “involutionary” competition and local governments’ financial difficulties, as well as medium- to long-term challenges such as an aging population amid declining birthrates.
“Last year, in anticipation of a trade war, the approach was more about emergency measures. Now, as the first year of the 15th Five Year Plan begins, there will be more focus on identifying new growth drivers and transforming the economy,” said Ding Shuang, Chief Economist for Greater China and North Asia at Standard Chartered. The meeting also stressed the need for innovation-driven development and to accelerate the cultivation and strengthening of new growth drivers, in line with the leadership’s long-term strategy in technological advancement.
