中国经济展望：中央经济工作会议释放“稳健施策”信号

CEWC signals a measured The CEWC pledged to optimise supply and unleash servicespotential. Policy support will likely be more measured, as itdropped “unfavourable” when describing the external Jian Chang +852 2903 2654jian.chang@barclays.com Ying Zhang+852 2903 2652ying.zhang3@barclays.comBarclays Bank, Hong Kong Yingke Zhou +852 2903 2653yingke.zhou@barclays.comBarclays Bank, Hong Kong Previously published in Global Economics Weekly: Delicate monetary policy, rough geopolitics, 12 China’s annual Central Economic Work Conference (CEWC), which sets priorities for economicpolicy in the following year, concluded its two-day meeting on 11 December1. The conference reiterated more proactive macro policies that are forward-looking, targeted, and coordinated.We view the macro policy stance and signals sent as broadly in line with our below-consensusgrowth forecasts, with policy support likely remaining measured and reactive. This is partlybecause the CEWC sees less urgency for big policy support in 2026 compared with 2025, in view On balance, the meeting emphasised more on development than security, in our view,acknowledging pronounced domestic imbalances of strong supply but weak demand. It keptdomestic demand as the top priority for next year, and put "stable growth and reasonable pricerecovery as main considerations" for monetary policy, in a sign thatofficialsrecognise the Within domestic demand, there is a growing emphasis on services consumption, investing inpeople, and commitments to stabilising investment amid recent declines. Housing, on the otherhand, was moved to the bottom of the agenda, reflecting the ongoing economic transformationand continued city-specific and market-oriented approaches to tackle property and developerrisks adopted by the central government. Meanwhile, the authorities confirmed the We highlight several key takeaways from the CEWC meeting. •On fiscal policy,China will “continue implementing a more proactive fiscal policy” and“maintain a necessary fiscal deficit, total debt size and total expenditure.” This is ashiftfromlast year’s pledge to raise the fiscal deficit ratio and issue more ultra-long special treasury Domestic demandremains the top policy priority for next year. The CEWC emphasised“prioritising domestic demand and building a strong domestic market.” On consumption, thegovernment will optimise the consumption subsidy programme, and has signalled anincreasing focus on services, with an aim to unleash service potential. With a continued appropriately increase central government investment and advance the “Two Majors” projects. We think local government debt resolutionefforts(to eliminate hidden LG debt bymid-2027) will remain as a needed constraint on LG capacity for FAI investment. On housing, this sector remains under the risk-resolution section, but with its ranking in thepolicy agenda lowered to last (eighth) fromfifthin 2024. We think this likely signalling alonger-term approach to transition the economy away from the old property-credit-drivengrowth model to promoting new productive forces and an innovation-driven economy. Thecentral government will likely to continue follow a city-specific and market-oriented •On monetary policy,the CEWC reiterated “growth stabilisation and reasonable pricerecovery as the main considerations for monetary policy”, as noted in the Q3 Monetary Policyreport (11 November), adding the need to “flexibly andefficiently"use various policy toolssuch as RRRs and interest rate cuts. This is in contrast to the more explicit call at the 2024CEWC to “cut the RRR and interest rates at the appropriate time.” We continue to see an 10bpcut in the policy rate, though with somewhat reduced probability, and a 50bp RRR cut in Q1 Oninnovation, aligned with the Fourth Plenum's call to achieve remarkable results withhigh-quality development during 15th Five-Year Plan, the CEWC stressed the need forinnovation-driven growth next year. It urged deeper adoption of AI Plus. In late August, the On theexternal environment, the CEWC statement dropped the wording “unfavourable”which appeared in front of “deepening impact” in the 2024 statement. This suggest the US-Chinatarifftruce is likely to hold. Following the Trump-Xi meeting in Korea in late October, the US has said several times that China has complied with terms of trade deals made3. On 9 December, President Trump also granted Nvidia permission to ship its H200 AI chip to China4.Meanwhile, US Treasury Secretary Bessent said there may be as many as four meetingsbetween the two presidents next year. That said, we continue to expect rising trade and investment tensions between China and non-US economies (see China Outlook – market, and is considering requiring industries to reduce purchases from China to de-risk anddiversify supply chains for key sectors like rare earth6. CPI accelerates in November… Headline CPI inflation came in at 0.7% in November versus 0.2% in October, marking the fa