BEIJING, Dec 8 — Beijing will keep expanding domestic demand and support the broader economy with more proactive policies in 2026, said the Communist Party's Politburo, its top decision-making body.
Analysts opined that the remarks about a "more proactive fiscal policy" and "appropriately loose monetary policy" point to a high budget deficit, debt issuance and additional rate cuts next year to reach a growth target likely to remain at around five per cent.
State media Xinhua reported today that China will make efforts to "stabilise jobs, firms, markets and expectations" to achieve a good start for the next five-year plan.
The world's second-largest economy is on track to reach this year's growth target of around five per cent, but faces headwinds from a prolonged property slump, weak consumer demand, excess factory capacity in some sectors, and declines in infrastructure-led investment.
Even though China and the United States (US) reached a trade truce, Chinese manufacturers are still ramping up efforts to diversify their export markets, pursuing closer trade ties with Southeast Asia and other emerging markets, and leveraging Chinese firms' global footprint to establish new production hubs for low-tariff access.
Today's Customs data showed Chinese shipments to the US dropped 29 per cent year-on-year in November, but exports to the European Union grew by 14.8 per cent annually last month, and the fast-growing Southeast Asian economies took in 8.2 per cent more goods over the same period.
China will better coordinate its domestic economic work and international trade battles next year.
Investors and economists are now waiting for the annual Central Economic Work Conference in the coming days, which is expected to set key growth targets and policy intentions for next year, part of Beijing's efforts to start the new five-year plan on a solid footing.
The targets will not be formally disclosed until the annual Parliamentary session in March.
Beijing has signalled a shift toward supporting household consumption and rebalancing the economy over the next five years to tackle worsening structural imbalances, but such measures may take time to deliver results.
Although the Xinhua report did not mention "household consumption" directly, it said the country should "adhere to the principle of domestic demand taking the lead and build a strong domestic market."
"We should put people's livelihood first and strive to do more practical things for the people," said the Politburo.
