(Yicai) Dec. 15 -- Major Chinese government departments have been quick to lay out their strategies on how to implement the economic agenda for 2026 that was set at last week’s Central Economic Work Conference, with a focus on stabilizing investment, clearing overdue payments owed to enterprises and accelerating the development of new growth drivers.

The National Development and Reform Commission, the Ministry of Finance, the People's Bank of China, the Ministry of Industry and Information Technology and the State-owned Assets Supervision and Administration Commission have all, in quick succession, detailed their plans on how to execute next year’s economic blueprint.

Their focus includes fine-tuning the implementation of the "Two New" and "Two Key" initiatives. The former refers to a new round of large-scale equipment upgrades and consumer trade-in programs, while the latter pertains to major national strategies and the strengthening of security capabilities in key areas.

China will roll out additional policies next year in response to changing conditions, Han Wenxiu, executive deputy director of the Office of the Central Commission for Financial and Economic Affairs, said at the 2025-2026 China Economic Annual Conference on Dec. 13. Existing and new policies will be co-ordinated to combine their effect and keep the economy on a steady upward track.

The expenditure structure will be optimized to strengthen financial support for major national strategies, and more resources will be directed toward people-focused investments. Authorities will make better use of government bond funds, with greater emphasis on improving livelihoods, expanding domestic demand and boosting long-term growth momentum.

Fiscal authorities must accurately grasp the overall policy direction for next year, Finance Minister Lan Fo'an said at a meeting that he chaired on Dec. 12. China will maintain an appropriate level of fiscal deficit, total debt and overall expenditure, while enhancing the precision and effectiveness of policies. Preparations for next year’s fiscal tasks should be made early and implemented carefully to boost the effectiveness of macro-economic regulation and support sustained and healthy economic development.

Promoting stable economic growth and a reasonable rebound in prices will be key considerations for monetary policy, the PBOC said at a meeting held on Dec. 12. The central bank will flexibly and efficiently use a variety of monetary policy tools, such as reserve requirement ratio cuts and interest rate reductions, strengthen financial support for the real economy and improve the use of targeted monetary policy tools. Coordination with fiscal policy will be enhanced to encourage financial institutions to step up support for key areas such as domestic demand, technological innovation as well as small and medium-sized enterprises.

Industrial Development

Next, China will thoroughly implement special actions to boost consumption, formulate and execute income growth plans for both urban and rural residents as well as raise basic pensions, Han said. New demand should guide new supply while new supply should create new demand. It is essential to adapt to changes in consumption patterns, expand the supply of high-quality goods and services, optimize the implementation of the "Two New" policies and allow local governments more autonomy. Efforts should also be made to remove unreasonable restrictions in the consumption sector and unlock the potential of service consumption.

Next year, the Ministry of Finance will make full use of various government bond funds, the ministry said at the meeting. This includes issuing ultra-long-term special treasury bonds to continue supporting the "Two Key" projects and the "Two New" initiatives. It will also leverage the "dual interest subsidy" policy for personal consumption loans and loans to service-sector businesses to strongly support the campaign to boost consumption.

China will implement a new round of actions for the high-quality development of key industrial chains, said Xiao Weiming, deputy secretary-general of the NDRC. Efforts will continue to be made to upgrade key industries, strengthen industrial foundations, tackle major technological challenges and develop advanced manufacturing clusters. The country will fully roll out the ‘Artificial Intelligence+’ initiative, improve the low-altitude economy’s industrial ecosystem as well as promote demonstrations for the large-scale application of new technologies, products and scenarios.

Innovation Focus

Future policies put greater emphasis on basic research, breakthroughs in core technologies, and the systems that turn research results into real-world applications, said Zhang Jun, chief economist at China Galaxy Securities. The aim is to encourage companies to take the lead in innovation and boost research and development investment through a mix of policy tools.

The MIIT said at a meeting chaired by MIIT Minister Li Lecheng on Dec. 12 that it will push ahead with the optimization and upgrading of the industrial structure, launch initiatives to revitalize traditional industries, build new pillar industries and foster future-oriented sectors. It will also deepen the digital transformation of manufacturing and expand "AI + Manufacturing," while promoting smart, green and service-oriented manufacturing.

The new round of actions for the high-quality development of key industrial chains is a major step toward steady progress while enhancing quality and efficiency, Li Jin, chief researcher at the China Enterprise Research Institute, told Yicai. This initiative will be a systematic industrial upgrade guided by central government strategy, led by state-owned enterprises and focussed on innovation and integration.

Editor: Kim Taylor