China is preparing to maintain its target of nearly 5% annual economic growth in 2026. This goal is part of Beijing’s preparations to launch its new five-year plan on a solid foundation, with a focus on supporting fiscal and monetary policies, boosting household consumption, and gradually restructuring the economy. This coincides with intensified reforms to strengthen the social safety net and support the real estate sector. The Chinese government is expected to continue supporting consumer spending policies, potentially shifting some funds from goods to services. China is also likely to resume easing monetary policy in early 2026, particularly following the decisions of the annual Central Economic Conference. Chinese leaders have made strengthening the domestic market a top economic priority for 2026, as Beijing seeks to protect itself against risks stemming from global trade.
In this context, the Chinese Political Committee held its meeting on Monday, December 8, 2025, to determine the economic priorities for 2026. Led by members of the Political Bureau of the CPC Central Committee and chaired by General Secretary “Xi Jinping”, the meeting discussed the priorities for economic work in 2026 and reviewed new regulations to strengthen rule-of-law governance. It is expected that in 2026, China’s economic policies will focus on implementing more proactive and effective macroeconomic policies, aiming to achieve economic and social development goals, address any challenges, and enhance China’s economic, technological, and defense capabilities. This will be coupled with the growth of China’s soft power globally through its cultural centers and the role of Confucius Institutes in promoting Chinese language and literature.
The year 2026 is expected to witness a stronger push by China for high-quality development, expanding domestic demand, improving the supply side, and developing modern production forces suited to the country’s conditions. This will be accompanied by efforts to build a unified national market and reduce risks in key sectors. Simultaneously, it will require coordinating development with security, strengthening reform and innovation, supporting urban-rural integration, and accelerating the green transition to achieve carbon neutrality. The Communist Party of China is expected to further strengthen its leadership of economic work and consolidate the rule of law, thus supporting sustainable and high-quality development in the coming period.
In 2026, China is expected to implement more proactive macroeconomic policies, committing to accelerating the construction of a new development pattern and promoting high-quality growth as it prepares to enter the final year of its 14th Five-Year Plan. Furthermore, China is expected to make significant progress in 2026 in developing new production forces, implementing reforms, and mitigating risks. As key social and economic development goals remain on track, the country is likely to achieve its target of around 5% economic growth. However, China’s shift towards a more domestically driven economic model, aiming to increase households’ contribution from approximately 40% to 45% of GDP over the next five years, will necessitate extensive structural reforms, especially given the anticipated continued global deflationary pressures until 2026.
I anticipate that allocations to China’s software and IT services industry will increase, leading to stable revenue growth through 2026. This reflects the expansion of China’s technology sector and the rising domestic and international demand for Chinese software and related services, which will support continued Chinese investment in this vital sector.
