China's Economic Agenda for 2026: Empowering Domestic Demand and Innovation

In December 2025, the annual Central Economic Work Conference in Beijing gathered China's top leaders to shape the nation's economic trajectory for 2026 and beyond. This meeting is widely regarded as the compass for China's economic development strategies. President Xi Jinping participated in the conference, delivering a keynote address that reviewed the economic performance of 2025, assessed new challenges, and outlined priorities for the upcoming year, the first of the 15th Five-Year Plan (2026-2030).

During the conference, policymakers highlighted the focus for 2026 on achieving "progress while ensuring stability" and "improving quality and efficiency" in economic policies. Eight core tasks emerged from these discussions, which include stimulating domestic demand, fostering innovation, deepening reforms and opening up markets, promoting a low-carbon development model, and improving the living conditions of the population. This conference sends a clear message: China approaches 2026 with confidence, defined political goals, and renewed momentum, providing stability and opportunities for the global economy.

Boosting Domestic Demand as the Key Growth Engine

One of the pivotal points discussed at the conference was enhancing domestic consumption, which leaders identified as the primary economic priority for the year ahead. Concrete measures aimed at stimulating spending were laid out, including the optimization of new policies focused on the comprehensive modernization of equipment and the replacement of consumer goods. Policymakers also discussed removing unnecessary restrictions in the consumption sector to realize the potential of service consumption.

Data illustrates that China's consumer market remained robust in 2025. Consumer spending contributed 53.5% to GDP growth during the first three quarters, signifying a nine percentage point increase compared to the previous year. Retail sales of consumer goods surpassed 40 trillion Yuan (approximately $5.7 trillion) from January to October, reflecting a 4.3% year-on-year growth, which exceeded the prior year's growth rate.

In an exclusive interview with CGTN, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), explained the recent upward revision of the GDP forecast for China in 2025. She emphasized the role of domestic consumption in bolstering economic resilience and praised China's commitment to maintaining an open and responsible economic environment, reinforcing the focus on consumption in the new Five-Year Plan.

Innovation as the Engine for New Growth

Innovation will continue to be a significant driver of development. China plans to establish international innovation centers in key areas such as the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Greater Bay Area which encompasses Guangdong, Hong Kong, and Macau. The focus of policy will shift towards promoting enterprise-led innovation, strengthening intellectual property protection in emerging sectors, expanding service sector capacities, and fostering artificial intelligence development through enhanced governance and the integration of technology and finance.

According to the Global Innovation Index 2025, China ranked within the top 10 for the first time, maintaining its position as the highest-ranked nation among 36 upper-middle-income economies. Its innovation clusters are globally competitive, with the Shenzhen-Hong Kong-Guangzhou cluster securing the top rank worldwide. Bloomberg Economics forecasts that China's high-tech sector, including artificial intelligence, will grow from 14.3% of GDP in 2023 to nearly 19% by 2026.

An Open China Provides Global Security

Openness remains one of China's strategic advantages. The conference reaffirmed the commitment to expand institutional and autonomous openings in the services sector, optimize free trade zone structures, and advance the development of the Hainan Free Trade Port.

Despite global challenges, China's foreign trade displayed resilience throughout the year. From January to November, import and export volumes totaled 41.21 trillion Yuan, reflecting a 3.6% increase from the previous year.

A recent global survey conducted by CGTN revealed that 86.7% of respondents believe China’s ongoing efforts to stimulate domestic consumption will create significant opportunities for international businesses. Furthermore, 89.1% said that China's continued opening will provide broader development opportunities worldwide.

As China embraces 2026, its economic policies signal a commitment to domestic vitality, innovation, and a cooperative global approach, laying a foundation for sustainable growth both nationally and internationally.