According to a report by China Daily on March 6…
China is preparing a fresh round of policy support to strengthen domestic demand and stabilize economic growth, as policymakers aim to meet this year’s growth target and lay the groundwork for the country’s next five-year development cycle.
At a press conference held during the annual parliamentary session in Beijing, senior economic officials signaled a coordinated mix of fiscal, monetary and industrial policies designed to sustain economic momentum in 2026.
Growth Target Anchored Around 5%
Zheng Shanjie, head of the National Development and Reform Commission, said China has the economic capacity to achieve its 2026 growth target of around 4.5–5 percent, supported by the country’s large economic base, technological innovation and policy flexibility.
According to Zheng, even growth at that level would add more than 6 trillion yuan ($869 billion) to the economy this year—roughly equivalent to the annual output of a mid-sized developed economy.
Such expansion, he noted, would help stabilize employment, support household incomes and contain financial risks.
Monetary Easing Likely to Continue
China’s central bank signaled that further monetary easing could be on the table.
Pan Gongsheng, governor of the People’s Bank of China, said authorities are prepared to reduce banks’ reserve requirement ratio (RRR) and lower interest rates if needed, following earlier targeted adjustments to policy tools at the start of the year.
The move suggests policymakers remain cautious about economic headwinds while keeping liquidity conditions supportive.
Record Fiscal Expansion
Fiscal policy will also play a prominent role in supporting growth.
Finance Minister Lan Fo’an said total government bond issuance—including central and local government debt—will reach 11.89 trillion yuan this year, marking one of the most expansionary fiscal stances in recent years.
Part of the stimulus will be directed toward boosting domestic demand. The central government has allocated 100 billion yuan for a coordinated policy package combining fiscal subsidies and financial support tools.
These measures aim to encourage private investment and household consumption, including interest subsidies, financing guarantees and risk-sharing mechanisms designed to amplify the impact of public spending.
Consumption Support and Retail Upgrade
China is also expanding programs aimed at encouraging consumer spending.
The government has set aside 250 billion yuan for trade-in subsidies covering consumer goods such as home appliances and electronics—an expansion of last year’s program.
Wang Wentao, minister of commerce and head of the Ministry of Commerce of the People’s Republic of China, said the program will focus on green and smart products, while also providing stronger support to traditional brick-and-mortar retailers.
In addition, authorities are experimenting with new consumption models in 50 pilot cities and expanding market access for foreign investors in sectors including telecommunications, biotechnology and healthcare.
Investment Focus Shifts to Strategic Infrastructure
Public investment will remain a major pillar of economic policy.
Authorities plan to push forward 109 major projects outlined in the draft 2026–2030 development blueprint, covering infrastructure such as water systems, energy networks, computing capacity, next-generation communications, urban underground pipelines and logistics networks.
Total investment in these areas is expected to exceed 7 trillion yuan this year, according to Zheng.
The program also includes projects in emerging sectors such as artificial intelligence, low-altitude aviation, transportation integration, education and healthcare.
Strategic Industries Take Center Stage
Officials emphasized that strengthening China’s modern industrial system remains a central policy objective.
The country’s AI sector is expected to exceed 10 trillion yuan in size by the end of the next five-year plan, while industries built around the BeiDou Navigation Satellite System are projected to surpass 1 trillion yuan.
Meanwhile, China’s services sector could expand to more than 100 trillion yuan over the next five years, reflecting the economy’s ongoing structural shift toward services and consumption.
Policy Coordination Intensifying
Economists say the policy messaging suggests authorities are determined to prevent a sharper economic slowdown.
Song Yu, chief China economist at UBS Securities, noted that policymakers appear to be showing less tolerance for weaker growth and may aim to keep actual expansion closer to 5 percent this year.
Greater coordination between fiscal, monetary and industrial policies, he added, should help stabilize economic expectations as China enters a new development cycle.