China's Politburo signals forward-looking, coordinated economic policy

China's top leadership laid out the country's 2026 economic priorities at a Politburo meeting on Monday, sending a strong signal that next year's macroeconomic strategy will emphasize both coordination and forward planning. 

The December meeting has long served as a key barometer of policy direction. This year, the messaging has evolved from last year's "stability through progress" toward a focus on "improving quality and effectiveness."

Economists noted that the latest policy blueprint reflects a deeper recalibration of China's macroeconomic governance framework.

Guolian Minsheng Securities' chief economist Tao Chuan and his team highlighted that the meeting established a dual regulatory structure featuring countercyclical and cross-cyclical adjustments, aimed at enhancing the synergy between monetary and fiscal policy. Such an approach, they said, is designed to stabilize near-term economic operations while simultaneously improving long-term structural performance.

Zhao Wei, chief economist at SWS Research, underscored the meeting's emphasis on boosting "foresight, precision, and coordination" of policymaking. He noted that the leadership's call to leverage the combined effects of existing and new policy tools suggests that future measures will focus on strengthening alignment between fiscal and monetary actions, balancing aggregate and structural policies, and coordinating asset revitalization with incremental stimulus. This holistic approach, he said, reflects Beijing's broader goal of significantly improving macroeconomic governance capacity.

Meanwhile, Huatai Securities' Chief Analyst Shi Jinfeng observed that the policy tone has clearly shifted. The meeting signalled a departure from last year's focus, moving toward quality enhancement and efficiency gains, indicating that economic work will increasingly prioritize the effectiveness and sustainability of growth rather than the speed of expansion alone.

China's economy is projected to grow at five percent in 2025 and 4.5 percent in 2026, according to latest forecasts from the International Monetary Fund (IMF) on Wednesday. The IMF identified China's transition to a consumption-led economy as a key priority, in alignment with the government's stated objectives in the 15th Five Year Plan recommendations.

Similarly, the Asian Development Bank raised its 2025 growth forecast for China to 4.8 percent from 4.7 percent, citing resilient exports and continued fiscal stimulus in its latest Asian Development Outlook report released Wednesday.