Core Viewpoint - The Central Economic Work Conference held on December 10-11, 2025, outlines key tasks for 2026, emphasizing the need to explore economic potential, ensure policy support, and enhance domestic demand stability, marking a shift towards a more coordinated approach between supply and demand [2][3][4]. Group 1: Economic Growth and Policy Direction - The conference aims for a GDP growth target of around 5% for 2026, focusing on "qualitative effective improvement and reasonable quantitative growth" [11][12]. - The emphasis on "domestic supply strong, demand weak" indicates a shift in policy focus towards expanding domestic demand and optimizing supply coordination [8][12]. - The five new "musts" introduced in the conference reflect a deeper understanding of economic work, highlighting the need for effective demand stimulation and structural reforms [5][6][7]. Group 2: Fiscal Policy - The conference advocates for a more proactive fiscal policy, maintaining a necessary fiscal deficit and increasing the scale of special bonds to support economic stability [14][16]. - The expected fiscal deficit rate for 2026 is projected to remain around 4%, with an increase in special bonds to support local governments and address fiscal challenges [14][16]. - Emphasis is placed on optimizing fiscal expenditure structure and ensuring that fiscal policies effectively support economic growth and structural adjustments [14][16]. Group 3: Monetary Policy - A moderately loose monetary policy will be continued, with a focus on using various policy tools to support economic stability and reasonable price recovery [18][19]. - The conference highlights the importance of maintaining liquidity and guiding financial institutions to support key areas such as domestic demand and technological innovation [18][19]. - The potential for interest rate cuts and reserve requirement ratio reductions is acknowledged, although the space for such actions may be limited [18][19]. Group 4: Domestic Demand and Market Development - The conference prioritizes domestic demand, emphasizing the need to build a strong domestic market and implement measures to boost consumption and increase residents' income [20][22]. - The focus on a "urban and rural residents' income increase plan" indicates a strategic shift towards enhancing income levels to stimulate consumption [22]. - The commitment to expanding domestic demand is seen as essential for maintaining economic resilience in a complex international environment [20][22]. Group 5: Real Estate Market Stability - The conference stresses the need to stabilize the real estate market through targeted policies, including inventory reduction and supply optimization [23][24]. - Supportive measures for the demand side, such as tax reductions and increased access to housing loans, are anticipated to continue [24]. - The emphasis on "controlling increment, reducing inventory, and optimizing supply" suggests a focus on sales rather than investment in the real estate sector [24].

Group 1: Economic Policy Focus - The Central Economic Work Conference emphasized five new "musts" for 2024, including balancing total supply and demand, which will significantly influence the macro policy framework for 2025[4] - The conference highlighted the need to stimulate economic potential to address insufficient effective demand and expand domestic consumption[4] - Policies will focus on combining short-term support with long-term structural reforms to enhance market vitality and regulatory frameworks[4] Group 2: Investment and Fiscal Policy - Fixed asset investment saw a year-on-year decline of 1.7% in the first ten months of this year, prompting a call to "stop the decline and stabilize investment"[5] - The conference proposed maintaining necessary fiscal deficits and optimizing local government bond usage to stimulate private investment[5] - Continued implementation of a proactive fiscal policy is essential to address local fiscal difficulties and ensure basic public service funding[5] Group 3: Monetary Policy and Economic Stability - Monetary policy will prioritize stabilizing economic growth and ensuring reasonable price recovery, with a focus on using tools like interest rate cuts and reserve requirement ratio adjustments[6] - The aim is to maintain ample liquidity and support key sectors such as domestic demand, technological innovation, and small and medium enterprises[6] - The conference indicated that the inflation rate's recovery slope will be a critical observation point for 2025[5] Group 4: Social and Structural Reforms - A plan to increase urban and rural residents' incomes was highlighted, indicating a shift towards income-driven consumption policies[6] - The conference stressed the importance of stabilizing the real estate market, with policies aimed at managing inventory and improving supply[7] - Efforts to clear overdue corporate debts are expected to enhance credit systems and benefit industries with high accounts receivable ratios[7]