Core Viewpoint - The Chinese government aims to maintain stable economic growth, employment, and overall price stability in 2024, while promoting synchronized growth of residents' income and the economy [1] Economic Stability - The government emphasizes the need to ensure stable economic growth and maintain overall stability in employment and prices [1] - There is a focus on achieving a basic balance in international payments [1] Policy Approach - The approach for economic work in the coming year will be to adhere to the principle of seeking progress while maintaining stability and improving quality and efficiency [1] - There will be an increase in counter-cyclical and cross-cyclical adjustments to enhance the effectiveness of macroeconomic governance [1]

Core Viewpoint - The Central Economic Work Conference held on December 10-11 in Beijing analyzed the current economic situation and outlined plans for economic work in 2026, emphasizing the integration of stock and incremental policies and increasing counter-cyclical and cross-cyclical adjustment efforts [1] Group 1 - The conference highlighted the importance of collaborative efforts among various policies to enhance the effectiveness of macroeconomic governance [1]

Economic Policy Direction - The Central Political Bureau emphasizes a more proactive fiscal policy and moderately loose monetary policy for 2026 to ensure a good start for the "14th Five-Year Plan" [2][4] - The focus has shifted from "stability while seeking progress" to "stability while seeking progress and improving quality and efficiency," indicating a stronger emphasis on the quality and effectiveness of long-term growth [2][4] Economic Performance and Challenges - China's GDP growth for the first three quarters of 2025 is 5.2%, with a probability of meeting the annual target of around 5.0%, but the growth rate fell to 4.8% in the third quarter, highlighting weakening growth momentum and structural issues [4] - Key economic challenges include limited consumer spending power, insufficient innovation capacity, and pressures on the real economy from rising costs and financing constraints [4][6] Policy Implementation - The meeting calls for a combination of fiscal and monetary policies to stimulate economic growth, with an emphasis on enhancing the effectiveness of macroeconomic governance [5][6] - Experts suggest maintaining a fiscal deficit rate of no less than 4% to signal continued fiscal expansion and stabilize social expectations [6] Monetary Policy Adjustments - The monetary policy will focus on structural tools, with recent adjustments including rate cuts and the introduction of new monetary policy frameworks [8][9] - The emphasis on "cross-cycle adjustment" indicates a shift towards addressing medium- to long-term structural issues rather than solely relying on traditional counter-cyclical measures [9] Domestic Demand and Risk Management - The meeting stresses the importance of domestic demand in driving economic growth and the need for innovative and high-quality development [11] - There is a focus on addressing key risks in the economy, particularly in the real estate sector and local government debt, with proposals for systemic policy measures to stabilize the housing market [14]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - Economic development targets may be relaxed, and the marginal expansion of macro policies may be limited. The equity market is expected to continue its slow - bull trend in 2026. The bond market may see a short - term boost in confidence but sentiment remains weak. It is advisable to test the waters with a small position and retreat after capturing a 1 - 2bp small band [1]. Summary by Directory 1. Economic and Social Development Goals and Quality - Quantity Balance - The main economic and social development goals in 2025 will be achieved, marking a successful end to the "14th Five - Year Plan". For 2026, the focus is on the balance between quality improvement and reasonable quantity growth. The economic growth target is likely to be set around 5%, but there is a possibility of relaxation. Key structural reforms such as new - quality productivity and expanding domestic demand will be the focus of economic work [2][13][15]. 2. Coordinating Internal and External Development and Emphasizing Domestic Demand - The meeting called for better coordination of domestic economic work and international trade struggles, and development and security. In 2025, China's exports showed resilience but faced uncertainties. In 2026, the core of domestic demand expansion may be consumption, and unblocking consumption circulation through increasing wealth income may be crucial [3][16][17]. 3. Macro Policy Tone and Expansion - The macro policy tone remains unchanged, with a more active fiscal policy and a moderately loose monetary policy. However, the marginal expansion of policies may be limited, with a focus on enhancing the effectiveness of existing policies rather than large - scale incremental policy implementation [4][19][20]. 4. Promoting Supply Optimization - On the demand side, consumption is likely the main driver for expanding domestic demand. On the supply side, product structure upgrading is the core direction, and the key is to improve efficiency and revitalize the large - scale stock [5][21][23]. 5. Real Estate and Stock Markets - The meeting did not mention real estate and stock market arrangements. Real estate policies may continue to focus on risk prevention, and incremental policies may be triggered by specific events or data. The equity market is expected to continue its slow - bull trend in 2026, and the bond market may see a short - term sentiment boost but the adjustment trend is hard to reverse. A small - position trial with a 1 - 2bp band - trading strategy is recommended [6][24].

Group 1 - The core viewpoint of the article emphasizes the proactive macroeconomic policy for 2026, focusing on enhancing economic governance effectiveness and addressing structural contradictions in economic operations [2][3]. - The meeting highlighted the need for a more active fiscal policy and moderately loose monetary policy to stimulate economic growth and improve governance efficiency [3][4]. - The economic growth target for 2026 is set at around 5%, with a focus on maintaining a relatively loose fiscal and monetary policy to achieve this goal [4][5]. Group 2 - The emphasis on domestic demand and building a strong domestic market remains a priority, with strategies to boost consumption, expand effective investment, and eliminate barriers to a unified national market [6][7]. - The article notes that the consumer spending recovery has slowed down, with retail sales growth declining to 2.9% year-on-year in October, indicating potential downward pressure on consumption in the coming months [7]. - Investment strategies will focus on enhancing public services in education, healthcare, and elderly care, as well as advancing frontier technologies like new information technology and renewable energy [8].

Core Viewpoint - The 2026 economic work policy emphasizes a more proactive macroeconomic policy to enhance the effectiveness of economic governance and address structural contradictions in economic operations, aiming for quality improvement and reasonable growth in the economy [1][2][3]. Economic Situation Assessment - The current economic operation is generally stable, with a GDP growth of 5.2% year-on-year, although the growth rate has slowed to 4.8% in the third quarter, indicating weakening economic momentum and structural issues [2][3]. - The manufacturing PMI for November is at 49.2%, indicating a contraction for seven consecutive months, which signals ongoing economic downward pressure [2][3]. Policy Direction - The meeting calls for continued implementation of a more proactive fiscal policy and moderately loose monetary policy, enhancing the integration of existing and new policies to strengthen counter-cyclical and cross-cyclical adjustments [2][3]. - The fiscal policy during the "15th Five-Year Plan" period is expected to remain positive, with a focus on expanding domestic demand and supporting high-level technological self-reliance [3][4]. Domestic Market Development - The emphasis is on building a strong domestic market, with key strategies including boosting consumption, expanding effective investment, and removing barriers to the construction of a unified national market [6][7]. - The "15th Five-Year Plan" aims to significantly increase the household consumption rate, although recent data shows a decline in retail sales growth, indicating potential challenges ahead [7]. Investment Focus - Investment strategies should prioritize public service improvements and funding in education, healthcare, and elderly care, as well as in cutting-edge technology sectors like new information technology and renewable energy [8]. - There is a need for a fair competitive market environment and mechanisms to encourage private sector participation in major projects, creating a strong synergy between government and private investments [8].

Core Viewpoint - The "15th Five-Year Plan" emphasizes enhancing macroeconomic governance effectiveness and implementing more proactive macro policies to ensure coordinated efforts across various sectors for high-quality development [1][3]. Group 1: Macroeconomic Policy - The National Development and Reform Commission (NDRC) will focus on expanding policy space, innovating governance tools, and enhancing consistency in macro policy orientation during the "15th Five-Year Plan" period [1][3]. - The NDRC aims to improve the efficient collaboration among factors such as human flow, material flow, capital flow, and information flow, while revitalizing existing assets and optimizing new outputs to effectively respond to various risks and challenges [3]. Group 2: Policy Coordination - During the "14th Five-Year Plan," various departments strengthened collaboration and coordination across fiscal, monetary, industrial, investment, employment, consumption, pricing, and regional policies, accumulating valuable experience for the upcoming period [3]. - The NDRC will enhance work coordination, standardize government behavior, prevent undue interference, and fully leverage market mechanisms while flexibly using market-oriented legal methods to address market failures [3][4]. Group 3: Policy Evaluation and Adjustment - The NDRC will conduct consistent evaluations of incremental policies and strengthen the coordination between economic and non-economic policies, including assessing existing policies to ensure alignment with macro policy orientation [4]. - Policies that are inconsistent with macroeconomic goals will be adjusted, suspended, or revoked as necessary to improve overall macroeconomic governance effectiveness [4].