As The 2025 Central Economic Work Conference Approaches, What New Expectations Lie Ahead For Next Year’s Economic Agenda? Institutions Forecast Five Key Highlights

How Should The Upcoming Economic Conference Be Interpreted In Terms Of Setting Next Year’s Policy Tone? As The Opening Year Of The 15th Five-Year Plan, Strategic Planning Is Likely To Emphasize “Drawing Momentum From Industry, Generating Productivity From Technology, And Accelerating Growth Through Livelihood Consumption.” Within This Framework, Macro Policy Tools That Combine Counter-Cyclical And Cross-Cyclical Adjustments Are Expected To Reemerge As Central To Investor Considerations.

What Specific Macro And Industrial Expectations Might Arise? The Following Analysis Looks Ahead Through Five Core Questions.

Question One: How Will Next Year’s Economic Agenda Be Framed? For 2026, Authorities Are Likely To Maintain An Ambitious Growth Orientation While Refining The Macro Policy Architecture. Historical Patterns Show That The Opening Year Of A Five-Year Plan Typically Elevates Economic Work, With Growth Targets Often Positioned As A Stage High Point For The Plan Period. As The First Year Of The 15th Five-Year Plan, 2026 Carries Special Significance; Growth Objectives Will Likely Be Anchored To Potential Output To Preserve Policy Flexibility For The Remainder Of The Plan.

Correspondingly, The Macro Policy Framework Will Need To Evolve Beyond Short-Term Stabilization. The Emphasis Should Shift From Purely Counter-Cyclical Measures Toward A Hybrid Approach That Balances Immediate Growth Support With Medium- And Long-Term Structural Optimization Through Cross-Cyclical Interventions.

Question Two: Under A “Counter-Cyclical + Cross-Cyclical” Framework, What Can Be Expected From Fiscal And Monetary Policy In 2026? While Activating Proactive Fiscal Policy Remains Important, Strengthening Fiscal Sustainability Is Also A Priority Under The 15th Five-Year Plan. Therefore, Fiscal Policy Will Likely Combine Counter-Cyclical Support With Cross-Cyclical Measures. Given Constraints On Government Debt Ratios, There Is Limited Room For Large Adjustments To The Deficit Target In 2026. Fiscal Support Is Expected To Be Delivered Not Only Through Modest On-Budget Expansion But Also Via Off-Budget Channels, Such As Measures To Address Legacy Debt And Optimize Corporate Debt Structures, With The Broad Fiscal Deficit Ratio Potentially Rising By Around 0.5 Percentage Points.

Fiscal Policy Will Shift From Purely Increasing Aggregate Spending To Improving Efficiency, Reorienting From “Investment In Physical Assets” Toward “Investment In People.” Empirical Evidence Suggests Fiscal Multipliers From Consumption Exceed Those From Investment, So Resources Are Likely To Be Reallocated More Heavily Toward Education, Healthcare, And Social Security To Directly Improve Livelihoods And Stimulate Consumption.

Monetary Policy Will Also Deepen Its Integration Of Counter-Cyclical And Cross-Cyclical Tools, While Adopting A More Domestically Focused Stance. The Strategic Priority Of Building A Financially Strong Nation Anchors Monetary Policy’s Long-Term Direction, Reducing The Degree Of Synchronization With External Central Bank Actions. With Cross-Cyclical Considerations Reintroduced, Structural Monetary Instruments Are Expected To Play A Larger Role Alongside Conventional Rate And Reserve Ratio Adjustments, Enabling More Targeted Support For Key Sectors And Vulnerable Links.

At The Same Time, Fiscal-Monetary Coordination Mechanisms Are Likely To Become More Institutionalized And Routine, For Example Through Active Government Bond Operations, To Improve Policy Transmission And Stabilize Market Expectations.

Question Three: How Can Domestic Demand Be Systematically Activated? The Policy Focus On Promoting Consumption Is Undergoing A Subtle Recalibration. As The Effects Of “Two New” Policies Diminish, The Need For Their Continued Expansion May Decline In 2026. A Moderate Reduction In “Two New” Funding Would Create Fiscal Space For A Strategic Shift Toward Investing In People, Enabling The Introduction Of Service Consumption Subsidies At Scale.

Expanding Service Consumption Has Emerged As A Key Lever For Reviving Domestic Demand. The 15th Five-Year Plan Identifies Measures Such As Easing Market Entry And Encouraging Business Model Integration As Core Paths Forward. Policymakers Have Highlighted Current Constraints Including A Low Share Of Service Consumption, Talent Shortages, And Incomplete Standards And Regulation. Recognizing These Bottlenecks Is The First Step Toward Systemic Policy Responses, Signaling That Service Consumption Expansion Will Be A Top-Level Priority.

China’s Large Middle-Income Cohort Represents Substantial Service Consumption Potential. Sectors That Align With Demographic Trends And Social Needs—Such As Elderly Care, Childcare, Cultural Tourism And Wellness, And Domestic Services—Are Well Positioned To Lead Demand Expansion Under More Precise Subsidies And Policy Support.

Question Four: How Strong Is The Imperative To Stabilize Investment? Investment Will Be Essential To Deliver A Strong Start In The First Quarter. Historically, First-Quarter Investment Growth Has Been Robust, With Infrastructure Investment Particularly Prominent. Because Infrastructure Funding Is Largely Government-Sourced, It Is More Controllable Than Manufacturing Or Real Estate Investment. With New Policy-Based Financial Instruments And Additional Special Bonds Already Directed Toward Project Construction, Their Effects Are Expected To Continue Into The First Quarter Of Next Year.

Infrastructure Efforts Will Be More Precisely Targeted At Strategically Important Areas, Including Urban Renewal, Strategic Backbone Corridors, New Energy Systems, Major Water Conservancy Projects, And National Scientific Infrastructure. These Projects Combine Strategic Importance With Immediate Need, Providing Concrete Drivers For Investment Growth.

Real Estate Policy Should Continue To Prioritize Risk Prevention While Transitioning Toward High-Quality Development That Serves Livelihood And Social Security Objectives. Although Downward Pressure On The Property Market Persists, Its Drag On The Macro Economy Has Moderated. In The Short Term, Policy Will Emphasize Risk Containment And Stabilization To Help The Market Recover Gradually. Over The 15th Five-Year Period, The Sector Should Recenter On Housing’s Residential Function, Focusing On Quality Construction, Renovation Of Existing Stock, And Urban Renewal To Shift From Scale Expansion Toward Quality Improvement.

Manufacturing Investment Is Expected To Stabilize As Export Pressures Ease And Service Consumption Policies Take Effect. However, Attention Should Be Paid To The Risk That Corporate Global Expansion Could Reduce Domestic Investment Shares.

Question Five: On The Path To Building A Modern Industrial System, What Are The Key Highlights? Three Industrial Highlights Are Likely To Emerge In 2026. First, Corporate Globalization Will Continue To Advance. Enterprises Expanding Abroad Contribute To National Income Growth, So Policy Attention Should Balance Domestic GDP With The Global Accumulation Of National Wealth.

Second, The Deep Integration Of Artificial Intelligence Will Be A Core Enabler. Priority Will Be Given To Embedding AI Into Industrial Development And Social Services To Secure Leadership In Industrial Applications. Lowering Application Barriers In Employment, Healthcare, And Elderly Care Can Create A Positive Cycle Where Innovation Drives Application And Application Stimulates Further Innovation, Systemically Empowering Multiple Sectors.

Third, Accelerating The Formation Of New Strategic Pillar Industries Will Be Critical. Seizing Opportunities From Technological Revolutions To Build New Energy, New Materials, Aerospace, And Low-Altitude Economy Sectors Into Growth Pillars Will Support Both Quantity And Quality Of Economic Expansion. Sustained Efforts Are Needed To Raise The Share And Quality Of Strategic Emerging Industries As Foundations For New Productive Forces.