Internationally, China-U.S. relations in 2026 are expected to maintain a phased equilibrium, while in the long term, Trump is accelerating the "destructive restructuring" of U.S. hegemony. Chinese enterprises' overseas expansion and the internationalization of the yuan are likely to gain momentum. Domestically, the Fourth Plenary Session of the 20th CPC Central Committee has outlined a top-level design for economic and social development over the next five years. During the 15th Five-Year Plan period, the economic growth rate may stabilize around 4.8%, focusing on strengthening foundations and advancing emerging industries. Policies will prioritize building a modern industrial system, potentially achieving a "one-move-that-revitalizes-the-whole-game" effect, with notable progress in technological innovation, industrial upgrading, and curbing "involution-style" competition. Meanwhile, policy focus will shift toward balancing demand-side measures to stimulate domestic consumption, with service consumption emerging as a highlight. For 2026, China's macroeconomy is projected to show moderate recovery amid structural divergence, with growth likely lower in the first half and higher in the second half. Exports will remain resilient, investment will gradually rebound, while goods consumption may face short-term pressure. Looking ahead, global challenges and opportunities coexist, domestic policies will balance aggregate measures with reforms, and China's economy is poised for a "clear skies ahead" scenario during the 15th Five-Year Plan period.

**Shaping a Favorable External Environment**: In 2026, China-U.S. relations are expected to maintain a "competitive yet stable" dynamic, with manageable tensions and relatively muted financial market reactions. Election cycles may cause temporary disruptions in Q1 and Q4, while Trump’s focus on midterm elections in Q2 and Q3 could bring calmer external conditions. Long-term, Trump’s policies are accelerating the "destructive restructuring" of U.S. hegemony, driving global shifts in industrial, trade, economic governance, and socio-diplomatic policies, further fracturing and reshaping global industrial and financial orders. Against this backdrop, Chinese enterprises' overseas expansion and yuan internationalization will likely accelerate. On the industrial front, China’s rising competitiveness will drive technology, brand, and business model exports. Financially, as Chinese firms expand globally and concerns over the dollar system deepen, yuan internationalization will gain strategic momentum, supported by capital account liberalization and cross-border payment system development.

**Building a Modern Industrial System**: The 15th Five-Year Plan will focus on reshaping manufacturing profitability by curbing "involution," channeling resources toward emerging pillar industries. A modern industrial system anchored in advanced manufacturing requires resolving cutthroat competition, fostering innovation-to-profit cycles, and setting positive examples for industrial transformation. Structurally, this period marks China’s transition from a manufacturing giant to a powerhouse, with traditional industries stabilizing the base while AI, new energy, aerospace, embodied intelligence, and 6G emerge as future growth drivers. Key support measures include consolidating state-owned enterprises' role in innovation, leveraging capital markets to boost productivity, and advancing green transitions in energy and industry.

**Unleashing Domestic Demand**: The 15th Five-Year Plan may target ~4.8% annual growth, with policies rebalancing toward demand-side measures, particularly service consumption. To double GDP or per capita income by 2035, demand-side reforms will focus on income redistribution, social security enhancements, wealth effects from capital markets, and fiscal support for service sectors. In 2026, demand will likely show structural divergence: external demand outpacing domestic, subsidized goods outperforming non-subsidized, new industries surpassing old, and lower-tier cities leading higher-tier ones.

**2026 Macroeconomic Outlook**: Fiscal and monetary policies will provide calibrated support, fostering moderate recovery amid structural divergence. Fiscal policy will expand moderately, optimizing spending and accelerating local debt reforms, while monetary policy stays accommodative with structural adjustments. Investment-wise, infrastructure will rebound slightly on 15th Five-Year Plan momentum, manufacturing will balance "anti-involution" constraints with supply-demand realignment (highlighting high-tech sectors), and real estate declines will narrow due to supply cuts and policy support. Consumption will remain weak for goods (due to subsidy exhaustion and slow household balance-sheet recovery) but see structural bright spots in services. Exports will stay resilient, buoyed by non-U.S. demand, capacity shifts, and industrial competitiveness. Inflation will recover mildly, supported by improved supply-demand dynamics and core goods prices.

**Risk Factors**: - Unexpected escalation in global geopolitical tensions; - Slower-than-expected Chinese macroeconomic recovery; - Sharper downturns in advanced economies; - Domestic policy delays or shortfalls; - Reform progress falling short of expectations.