China Signals 2026 Economic Priorities at Central Economic Work Conference

China’s annual Central Economic Work Conference (CEWC) provided insight into the government’s economic priorities for 2026, highlighting a cautious but steady approach to growth amid domestic and global uncertainties. The meeting, held from Dec. 10–11 in Beijing, reaffirmed existing policy directions while signaling where policymakers see potential risks and opportunities.

Analysts said the conference underscored continuity rather than radical new measures, focusing on stabilizing key sectors, supporting domestic consumption, and fostering innovation and green energy initiatives. “The main focus this year is alignment with long-term targets rather than short-term stimulus,” said Wang Dan, China director at Eurasia Group.

Exports remain central to growth strategy

Exports received only limited attention in the official CEWC readout, with the sole explicit reference tied to services exports. Analysts, however, interpreted this as an implicit recognition of exports’ ongoing role in supporting growth.

“Since two years ago, exports have been essentially the only real economic driver,” Wang said, noting that domestic demand has generated little growth despite efforts to stimulate consumption and investment. China’s trade surplus reached US$1.08 trillion in the first 11 months of 2025, illustrating the continued reliance on external demand.

The export-driven approach carries risks. As China expands overseas investment and exports, trade frictions are likely to increase with the U.S., Europe, and other markets. Official customs data show exports grew 6.2% in the first 11 months of 2025, with strong growth to Europe, Southeast Asia, and Africa offsetting an 18.3% decline in shipments to the United States.

Hannah Liu, China economist at Nomura, highlighted potential limits to this model: “Geopolitical developments may increasingly constrain China’s export momentum,” she said, projecting export growth may moderate to around 4% in 2026.

Property sector focus shifts to stabilization

The CEWC emphasized stabilizing rather than reviving the housing market, with city-specific measures aimed at curbing new supply, reducing excess inventory, and improving housing quality. After years of a deep downturn, marked by falling sales and developer defaults, the property sector remains a concern for policymakers.

Su Yue, chief China economist at the Economist Intelligence Unit, noted that meaningful recovery would likely require fiscal spending comparable to the post-2008 Shantytown Redevelopment Projects, which totaled roughly 6 trillion yuan (US$840 billion). “Without that kind of scale, it will be difficult to achieve a clear stabilizing effect,” she said.

Officials are prioritizing “good-quality housing” over rapid expansion, suggesting a selective approach that does not include broad bailouts for developers. Analysts caution that risks to banks, households, and broader economic stability persist.

Consumption and domestic demand remain policy priorities

Boosting domestic demand continues to top the agenda. The CEWC pledged to raise household incomes, expand the supply of quality goods and services, and make better use of existing subsidy programs, including trade-in schemes for consumer products.

Policy continuity is evident, analysts said, with limited scope for additional stimulus. Liu noted that while extensive fiscal and targeted monetary support has been deployed over the past year, further intensifying subsidies seems unlikely.

The conference also signaled concern over “involutionary” competition—inefficient and self-defeating business practices—particularly in sectors tied to national security and technological self-reliance. Officials pledged to curb harmful pricing wars and excess capacity, reflecting a measured approach to boosting domestic efficiency.

Innovation and green energy underpin long-term strategy

The CEWC reinforced the role of innovation and green energy in China’s growth model. Plans include strengthening education, technology, and talent development, expanding AI adoption, upgrading industrial chains, and improving governance of emerging technologies.

“The call for mutual benefits between platform companies and workers shows awareness of the disruptive effects technological progress can have on labor markets,” said Su.

Green energy priorities were emphasized, with a national plan to build an “energy-strong nation” set to guide industrial development under China’s 15th Five-Year Plan. Analysts expect increased policy and financial support for new energy and carbon-related industries in 2026.

Investment stabilization highlighted

CEWC officials stressed halting declines in investment, particularly in fixed assets. Data from China’s National Bureau of Statistics indicate a 1.7% year-on-year drop in fixed-asset investment through October 2025, largely due to property sector weakness, though non-real estate investment grew 1.7%.

Analysts say policymakers are signaling recognition of the slowdown but remain focused on stabilizing rather than aggressively expanding investment. Measures include expanding local government bond quotas and deploying policy-based financial tools, with fiscal support guided by structural goals and debt discipline.

Eurasia Group’s Wang summed up the approach: “Containment is being prioritized over stimulus. Fiscal and monetary expansion is unlikely, with debt stabilization guiding policy.”