China pledges to expand demand with more proactive polices in 2026

China will keep expanding domestic demand and support the broader economy with more proactive policies in 2026, the Politburo, a top decision-making body of the ruling Communist Party, was cited as saying on Monday by state media Xinhua.



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 5%, analysts said.



China will make efforts to "stabilise jobs, firms, markets and expectations" to achieve a good start for the next five-year plan, Xinhua said. The world's second-largest economy is on track to reach this year's growth target of around 5%, 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 U.S. 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.