Speaking at the China Development Forum 2026, Pan Gongsheng said the country will “accelerate” its transition into a major global demand hub, building on its existing strength as a manufacturing powerhouse.
The shift will form a central pillar of China’s upcoming 15th Five-Year Plan (2026–2030), with reforms aimed at raising household consumption as a share of GDP. Key measures include improving income distribution and expanding social safety nets — areas long viewed by economists as critical to unlocking China’s consumption potential.
Lan Fo’an reinforced this direction, emphasizing increased fiscal spending on public services. Planned initiatives include subsidies for elderly and childcare services, as well as expanded access to preschool education, in an effort to reduce precautionary savings and boost household spending.
Monetary policy is expected to remain supportive. Pan said the central bank will continue to deploy tools such as reserve requirement ratio cuts and open market operations to ensure ample liquidity, while maintaining “reasonable” growth in total social financing.
Officials also pushed back against external criticism that China’s industrial competitiveness relies on excessive state subsidies. Pan argued that the country’s strengths stem instead from its large domestic market, deep supply chains, and sustained investment in research and development.
Executives from multinational firms, including Danfoss Group and ABB Group, highlighted growing opportunities tied to China’s expanding domestic demand and industrial upgrading, particularly in areas such as electrification, automation and artificial intelligence.
🧭 Takeaway for Global Investors
China’s policy messaging suggests a gradual but decisive shift toward consumption-led growth, though execution will likely be incremental.
👉 In the near term, growth will still rely on exports and investment.
👉 Over the medium term, domestic demand is being positioned as the next core growth engine.
The transition, if successful, could reshape China’s role in the global economy — from the “world’s factory” to a central node of global demand.