驾驭困境，通过新的驱动力引导中国经济

March 2026 China achieved 2025 growth target with steady economicexpansion In 2025, amid a complex and shifting domestic and globalenvironment, China’s economy showed an asymmetric growth,stronger early in the year and moderating toward year-end.Full-year gross domestic product (GDP) surpassed RMB140 trillion forthe first time, up 5.0% year-on-year (YoY). Final consumptioncontributed 52%1to economic growth, remaining the primaryengine and stabilizing anchor. However, the slowdown in the fourthquarter underscored the urgency of rebalancing domestic supplyand demand. Consumption’s “new normal” — moderate recovery withdivergence and variety.Total retail sales of consumer goods rose3.7% YoY in 2025. Communications equipment, buoyed by trade-inpolicies, surged 20.9% YoY2. As urbanization deepens, brandsexpand into lower-tier markets and on-demand retail rapidly scales,third- to fifth-tier cities have become core growth engines for fast-moving consumer goods (FMCG). Emotional consumption isemerging as a key lever to attract younger consumers. Fixed asset investment (FAI) softened with notable volatility,while high-tech industries provided critical support.As theinvestment in traditional infrastructure and real estate weakened,total FAI fell 3.8% YoY and the divergence in private investmentwidened. High-tech industries witnessed strong growth, withinvestment in information services and in the manufacturing ofaircraft, spacecraft and related equipment rising 28.4% and 16.9%3YoY. Foreign trade remained under pressure but shifted to a highergear.In 2025, total goods trade increased 3.8% YoY. Exports ofindustrial robots and high-end machine tools climbed 48.7% and21.5%4. A more diversified market strengthened resilience.Adjustments to export tax rebate policies for photovoltaics,batteries and other products may accelerate the phaseout ofoutdated capacity, pushing domestic firms to speed up overseascapacity deployment. Stimulating domestic demand and innovation to strengtheneconomic upturn in 2026 Strengthening counter- and cross-cyclical adjustments through integratedexisting and incremental policies:As the first year of the 15th Five-YearPlan, 2026 will prioritize stability with progress and focus on improvingquality and efficiency. The GDP growth target is likely to be set at 4.5%–5%.Building on a more proactive fiscal stance and a moderately accommodativemonetary policy, the government will emphasize tighter coordinationbetween existing and new measures to clear policy bottlenecks across tax,industry and financial systems. Boosting domestic demand and building a sustainable growth path withdomestic circulation staying at the forefront.On the consumption side,policy tools will focus on raising household income, strengthening socialsecurity and expanding services consumption to bolster purchasing powerand consumer expectation. On the investment side, stabilizing the structureis crucial, with focus shifting toward high-end equipment, new energy andartificial intelligence (AI) areas. Technology innovation is expanding from point breakthroughs to broaderdeployment, building a new “AI+” industrial ecosystem.Breakthroughs inlarge models and humanoid robots are moving past critical technologicalthresholds and entering a pivotal phase of industrialization. Innovation hubsin Jing-Jin-Ji, the Yangtze River Delta and the Greater Bay Area will evolvefrom isolated, city level breakthroughs to coordinated cluster development,enabling deeper integration of industry, innovation and capital chains. “Anti-involution” and supply side governance to strengthen thefoundations of a unified national market.Policymakers will continue tointroduce targeted, sector specific measures that promote industry self-discipline, rigorous supervision and market driven consolidation to rebalancesupply and demand. This reform cycle will enhance efficiency and qualityacross entire industrial chains from a long-term perspective. It is worthnoting that policy gradients may trigger potential risks of regionaldevelopment divergence. Institutional opening up to drive diversified and mutually beneficialservices trade.Policy will focus on optimizing the services trade structureand promoting higher value-added services exports. By aligning with highstandard international rules and removing hidden barriers to cross-borderservices, China will accelerate the development of new business models suchas digital trade and green trade and actively expand into emerging markets. Deepening collaboration across key city clusters to narrow regionaldevelopment gaps.Integrated regional development is essential to domesticcirculation. Major economic provinces serve as hubs of technologicalinnovation and frontiers of industrial transformation, they will need toleverage big data, AI and other digital tools to analyze regional industrialtrends, build tiered and complementary industrial chains and develop newquality productive forces that align with their local