The 15th Development proposals and long-term plans indicate China will begin building a new economy, an economy of tomorrow. From 2026 onward, high-quality development, new-quality productive forces, green transition, and carbon neutrality will become common terms. China will increasingly rely on domestic consumption-led growth, innovation-driven diversification, and new technological breakthroughs to steer its future economy. Accordingly, China will begin formulating and implementing policies aligned with these priorities and objectives.
China will devise policies and actions to foster consumption. It is expected to allocate between 800 and 1,000 billion yuan or more in ultra-long-term special treasury bonds to subsidise large-scale equipment upgrades and consumer goods trade-in programmes. This will spur consumption and create a vast market, as predicted by National Development and Reform Commission (NDRC). The NDRC has also projected industrial upgrading alone will generate a massive boost, creating a market worth 5 trillion yuan ($710 billion) annually. Meanwhile, government will implement policies and programmes to enhance incomes in both urban and rural areas. Pension reform is another priority, with plans to increase basic pension level. These measures will strengthen consumption by increasing people’s disposable income.
At the same time, government will accelerate equipment upgrade process, with a strong focus on achieving carbon peak and carbon neutrality. There is significant potential, as many large and small industries still rely on traditional equipment. They must upgrade to remain competitive in modern economy and reduce carbon emissions. State-owned enterprises (SOEs) will lead industrial upgrading by investing nearly 3 trillion yuan, with private sector expected to follow.
China will make high-quality development the primary focus as it transitions towards economy of tomorrow. The country will adopt a new economic model centered on scientific and technological innovation and development of disruptive, cutting-edge technologies. These technologies are expected to create niche advantages for Chinese companies and introduce new drivers of growth. As a result, China will prioritise investment in innovation, quantum computing, artificial intelligence, and advanced technology development pVrogrammes, enhancing technological self-sufficiency and self-reliance.
In 2026, China will also promote new types of industries to increase competitiveness of Chinese firms and establish itself as a global leader. These industries will be encouraged through targeted subsidies and supportive policies. For instance, China is developing world-class industrial clusters in Shanghai for pioneering sectors. It is also building four clusters — each valued at RMB 1 trillion ($137.28 billion) — in electronic information, healthcare, automobiles, and high-end equipment manufacturing.
Moreover, China has identified 100 iconic products and cutting-edge technologies, including humanoid robots, quantum computers, next-generation displays, 6G networks, brain–computer interfaces, artificial intelligence, low-orbit economy technologies, and third-generation internet infrastructure. These initiatives will accelerate realisation of China’s high-quality development vision in 2026.
China will develop an economy grounded in ecological civilisation and sustainable development. The country will focus on green growth, with industrial upgrading driving expansion of green industries that utilise energy-efficient technologies and renewable energy sources. Investment in clean and green energy will be fast-tracked. China is already quietly constructing a post-fossil-fuel energy system, but the pace is expected to accelerate in 2026. Notably, China is expected to fast-track work on a massive solar project on Tibetan Plateau, covering approximately 610 square kilometers — about the size of Chicago. Renewed attention will also be given to emerging green energy sources, such as green hydrogen and high-altitude wind energy.
China believes scientific and technological independence is essential for achieving high-quality development, building a “Beautiful China”, modernising governance, ensuring domestic and international stability, and establishing a comprehensive security framework. This independence has become increasingly urgent as United States and Western countries intensify efforts to restrict China’s access to advanced technologies and contain its technological progress. In response, China will launch new programmes to advance self-reliance across technological value chain.
To achieve these objectives, China will implement supportive fiscal and monetary policies. Government will pursue innovative policies combined with a pragmatic and proactive approach. Fiscal policy will remain expansionary, aimed at supporting domestic consumption and business development, while maintaining overall stability. Public spending will continue in key areas, such as education, healthcare, childcare, and eldercare, in line with 15th Five-Year Plan’s focus on investing in people. Expansionary policies are also necessary to accelerate implementation of high-quality development agenda. To support these efforts, China will issue ultra-long-term special treasury bonds.
On the monetary side, China has announced a moderately loose monetary policy. This approach allows greater flexibility and rapid responses to changing economic conditions. The primary goals will be to stimulate growth, facilitate industrial transformation, create jobs, and maintain financial stability. Although economists warn these policies could lead to a fiscal deficit of around 4pc, China appears willing to accept this risk, supported by its strong financial position and economic fundamentals.
China will place special emphasis on market unification. CPC leadership has observed some local governments are implementing protectionist policies or measures that undermine fair competition. This calls for government intervention to correct such practices. Consequently, CPC will formulate regulations to unify and regulate market, removing local barriers to entry and protectionist behaviors. These measures are expected to boost investor confidence and attract both domestic and foreign investment.
China will continue, rather than accelerate, pace of comprehensive reforms to establish a high-standard socialist market economy. Such an economy will unlock market potential, eliminate institutional and market barriers, enhance productivity, and spur innovation. To ensure a rule-based, predictable, and stable market environment, strong regulation and strict enforcement of rules will be maintained.
These reforms will also support green transition, high-quality development, growth of advanced productive forces, dual circulation strategy, and welfare and prosperity of people. China will further promote comprehensive market opening and offer special opportunities for least-developed and developing countries to benefit from China’s vast market.
Nevertheless, China recognizes the road ahead will not be smooth. The country will face numerous domestic and international challenges. Globally, China must contend with trade wars, technological sanctions, and negative sentiment. Critics attempt to portray China’s challenges, such as real estate issues, debt, and weak consumer confidence, as existential threats to economy. While these challenges are real, they must be examined carefully, separating facts from propaganda.
Undoubtedly, managing debt will remain a major challenge for China in 2026 and beyond.
To be continued...
