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 measuredapproach The CEWC pledged to optimise supply and unleash servicespotential. Policy support will likely be more measured, as itdropped “unfavourable” when describing the externalenvironment and highlighted a “necessary” fiscal deficit andspending and “flexibly andefficiently”using RRR and ratecuts. Jian Chang+852 2903 2654jian.chang@barclays.comBarclays Bank, Hong Kong 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, 12December 2025. 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 conferencereiterated 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 viewof a perceived improving external environment (“unfavourable” dropped from statement), as itpledged to maintain “necessary” levels for the budget deficit and government spending, whileemphasising the “flexible andefficient”use of monetary policy tools such as RRR and interestrate cuts. 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 theeconomy’s challenges. The meeting minutes also emphasised that these are largely transitionalissues, solvable through sustained policyefforts.Five key principles were outlined: 1) fully tapthe country’s economic potential; 2) combine policy support with reform and innovation; 3) letmarkets operate freely while being well regulated; 4) align investment in projects withinvestment in people; and 5) strengthen China’s capabilities to manage external challenges. 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 thecontinuation and deepening of the anti-involution campaign, though with limited details. 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 treasurybonds. We think this is in line with our view of modest fiscal expansion in 2026 given thetarifftruce, which will likely see a similar budget deficit level in 2026 as this year – around 4% ofGDP or slightly above. •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 continuedemphasis on "investing in people" and promoting positive views on marriage and raisingchild to stabilise the birth rate, we expect consumption support to align more closely withChina’s long-term strategies, such as fertility, healthcare, and related sectors. On investment,China will promote a stabilisation of investment levels. We note that FAI posted a fourthconsecutive month of outright contraction in October. The CEWC also noted a need to appropriately increase central government investment and advance the “Two Majors”2projects. 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-orientedapproach towards the real estate sector, gauging the potential financial systemic risks, if any,arising from a rapidly de