China has announced plans to roll out proactive macroeconomic policies in 2026 to stimulate growth and ensure long-term economic stability, following a sharp downturn in the industrial sector.
Recent data from the National Bureau of Statistics revealed that industrial profits fell 13.1% year-on-year in November, following a 5.5% decline in October, marking the steepest drop in over a decade. The contraction highlights weakening domestic demand and ongoing deflationary pressures.
State media CCTV quoted President Xi Jinping, who reaffirmed China’s growth target of around 5% for 2025. Xi projected the nation’s economy to reach 140 trillion yuan ($20 trillion) by the end of the year.
“Under pressure, our economy is expected to move forward, demonstrating resilience and vitality. The focus will be on effective qualitative improvement alongside reasonable quantitative growth,” Xi said during a New Year’s address.
The government’s strategy emphasizes measures to increase household incomes, boost consumption, and promote growth-driven investment. In line with this, 62.5 billion yuan has been set aside in a special treasury fund to support a consumer goods trade-in program for 2026.
Additionally, China’s state planner has announced investment plans for two major construction projects, allocating 295 billion yuan in central budget funding to strengthen the economic outlook and encourage investment.
China’s industrial slowdown has been attributed to multiple factors, including weak domestic demand, declining fixed-asset investments, factory-gate deflation, the ongoing property crisis, sector-specific slowdowns, and structural adjustments amid market volatility.
By proactively implementing fiscal and investment measures, China aims to stabilize its industrial sector, boost consumption, and maintain momentum toward sustainable growth in 2026.
