The Central Politburo meeting held on December 8 analyzed and outlined the economic priorities for 2026, sending a robust signal for achieving a strong start to the 16th Five-Year Plan period.

**Reviewing 2025: Key Targets on Track** Amid a complex domestic and international environment, stable and high-quality growth remained the central theme for China's economy in 2025. Despite fluctuations in Q3 growth, the economy expanded by 5.2% year-on-year in the first three quarters, outpacing the previous year by 0.4 percentage points. The Politburo meeting noted that economic performance remained "generally stable with steady progress," emphasizing that "major economic and social development goals will be successfully achieved."

Several factors underpin this assessment. First, China's 5.2% growth in the first three quarters ranks among the highest of major economies globally. Notably, Q3 GDP reached 35.5 trillion yuan, surpassing the full-year economic output of the world’s third-largest economy in 2024. Second, structural adjustments and shifts in growth drivers are yielding results. The latest data shows the Purchasing Managers' Index (PMI) for high-tech manufacturing has remained above the expansion threshold for ten consecutive months, indicating sustained growth in related sectors. The meeting also highlighted "steady development of new quality productive forces."

Looking further back, the meeting affirmed that China's hard power—spanning economy, technology, and defense—and soft power, including culture, institutions, and diplomacy, have significantly strengthened over the past five years. The 15th Five-Year Plan is set to conclude successfully, laying a solid foundation for the next phase of modernization goals.

**Outlook for 2026: High Standards for a Strong Start** The 16th Five-Year Plan period is positioned as a "critical phase to solidify the foundation for socialist modernization and drive comprehensive progress." The Politburo meeting outlined a series of comparative priorities for 2026, including: - Better coordination between domestic economic priorities and international trade challenges. - Balancing development and security with more proactive macro policies. - Enhancing policy foresight, precision, and synergy.

Additional measures include expanding domestic demand, optimizing supply, revitalizing existing resources, fostering new quality productive forces tailored to local conditions, advancing a unified national market, mitigating risks in key sectors, and stabilizing employment, businesses, markets, and expectations. Analysts anticipate stronger policy coordination will deliver more impactful results.

Ming Ming, Chief Economist at CITIC Securities, noted that 2026, as the inaugural year of the 16th Five-Year Plan, is expected to see a steady economic start driven by proactive macro policies and forward-looking structural reforms, setting the stage for long-term modernization goals by 2035.

**Policy Direction: Stability, Progress, and Efficiency** The meeting reiterated the principle of "seeking progress while maintaining stability" for 2026, with added emphasis on "quality and efficiency." This reflects policy continuity, stability, and precision. Key measures include: - Continued proactive fiscal policy and accommodative monetary policy. - Leveraging the combined effects of existing and new policies. - Strengthening counter-cyclical and cross-cyclical adjustments to enhance macroeconomic governance.

Eight focal areas were highlighted: domestic demand-driven growth, innovation, reform, openness, balanced development, carbon neutrality, people's livelihoods, and risk prevention.

Deutsche Bank’s Chief China Economist Xiong Yi projected that China’s economy in 2026 will stay on a "determined trajectory," with fiscal expansion persisting and monetary policy acting precisely. Consumption will remain the primary growth driver, investment’s contribution will rebound, and exports are expected to stay robust.

As a key indicator of next year’s economic policies, the Central Economic Work Conference is set to convene soon, offering further clarity on policy coordination for a strong 2026 start.