China’s Politburo pledges action to tackle trade ‘struggles’ in 2026

China has pledged to better coordinate its domestic economic work to account for international trade turbulence next year, with a high-level decision-making body calling for the promotion of “effective qualitative improvement and reasonable quantitative growth” in the country’s economy. After a meeting of the ruling Communist Party’s Politburo on Monday, the 24-member body said China would “seek progress while maintaining stability” in next year’s economic work, and continue to exert a “more proactive” fiscal policy and “moderately loose” monetary policy. “[We need] to better coordinate domestic economic work and international economic and trade struggles, as well as development and security,” according to a readout released by state news agency Xinhua. It highlighted the need to “keep domestic demand as the main driver” and build a robust market within the country’s borders, while calling for promoting innovation and “accelerating the cultivation and expansion of new growth drivers”. Historically, the Politburo’s December meeting has been closely followed by the annual central economic work conference, which typically sets the tone for policy in the year ahead. Su Yue, principal economist for China at the Economist Intelligence Unit, said describing next year’s international economic and trade work as a “struggle” highlighted that stabilising foreign trade – especially maintaining trade relations beyond the US – has been “elevated to one of the Party’s key priorities.” “The emphasis on a ‘spirit of struggle’ – daring to take a firm stance in the face of major challenges, confront conflicts head-on, and step forward amid crises – suggests that China expects the external trade environment to remain difficult,” Su said. “It also indicates that China is unlikely to make major concessions simply to secure temporary peace.” As the world’s second-largest economy is seen as largely staying on course to reach its annual economic target this year despite rising external headwinds – notably a renewed trade war with the United States that escalated to an unprecedented level earlier this year, attention is now shifting to 2026, the first year covered by China’s 15th five-year plan. Domestically, Beijing is still grappling with a range of challenges to sustained growth, including sluggish demand, a prolonged property crisis, persistent deflationary pressures and an ageing population. Aggressive capacity reduction could lead to economic shocks Su Yue, Economist Intelligence Unit Last Wednesday, the party’s Central Committee held a symposium with figures from outside the party to solicit their views on next year’s economic agenda, Xinhua reported on Monday. At the conclave, President Xi Jinping called on those present to “actively contribute ideas and efforts to formulate and implement the 15th five-year plan” and pool their strengths to “promote the economy’s steady improvement”. Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, said the readout showed the government will consider internal and external economic conditions under one framework. “I think this means the economic policies for next year will be arranged more flexibly than before,” he said. “Despite the truce between the US and China on trade, China still expects high uncertainty next year. The domestic policies may need to be adjusted depending on the external economic environment.” The readout also said the country would “implement more proactive and effective macro policies, and strengthen the forward-looking, targeted and coordinated nature of policies” in 2026. The Politburo also pledged to stabilise employment, enterprises, markets and expectations to “promote effective qualitative improvement and reasonable quantitative growth of the economy” and “achieve a strong start to the 15th five-year plan period”. Su noted the phrase “reasonable growth in both quantity and quality” reflected concerns about the cutthroat, low-quality competition affecting several industries, a phenomenon referred to as “involution” in official rhetoric. “How China will balance foreign trade, involution pressures and setting realistic growth targets will be a key focus of the coming central economic work conference. Aggressive capacity reduction could lead to economic shocks.” Other pressing tasks named in the readout included defusing risks in key areas, preparing national and local five-year plans, addressing overdue payments to enterprises as well as wages owed to migrant workers, and safeguarding basic living standards. Wang Dan, China director for Eurasia Group, said China is likely to set its target for gross domestic product growth at “around 5 per cent” again in 2026. The Politiburo readout highlighted a “forward-looking” approach, which means Beijing may refrain from using excessive fiscal expansion to boost its economy, she said. “If China keeps good momentum on exports, it would not need to exert too much fiscal stimulus to achieve its growth target,” Wang said. Driven by extensive diversification efforts, China’s exports rose 5.9 per cent year on year in November, bringing its trade surplus to US$1.076 trillion in the first 11 months of the year, surpassing 2024’s full-year figure and hitting an all-time high. Guo Lei, chief economist at GF Securities, said in a research note late last month that China’s economy is expected to “bid farewell to export-led growth on a one-way basis” as it seeks a greater share of consumption in GDP. “In the first year of the 15th five-year plan, the investment gap is highly likely to see some repair,” he said. “There will be policy dividends that further narrow the consumption gap and drive a stabilisation of the property sector.”

China’s Politburo pledges action to tackle trade ‘struggles’ in 2026

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Analysts said the decision-making body’s phrasing on the international trade environment suggests a cautious stance next year despite US truce

Analysts said the decision-making body’s phrasing on the international trade environment suggests a cautious stance next year despite US truce