Rebalancing China's high-quality development amid global uncertainty

Editor's Note: Xin Ge, a special commentator for CGTN, is a research fellow at the Institute of Public Policy and Governance, Shanghai University of Finance and Economics (SUFE), and a chair associate professor at the School of Public Administration and Policy, SUFE. The article reflects the author's opinions and not necessarily the views of CGTN.

China's 2025 Central Economic Work Conference convened at a moment of heightened geopolitical tension and domestic economic transition. This annual meeting has always served as a barometer of policy priorities, but this year it carried added weight: the global environment is less predictable, China's economic cycle is shifting, and the country stands at the dawn of the 15th Five-Year Plan (2026-2030) period. The decisions taken now will shape China's growth trajectory well beyond 2026.

A notable development was the introduction of a new policy formulation: the need to "better coordinate domestic economic work with struggles in the international economic and trade arena." Its placement alongside the long-established principle of "balancing development and security" signals a clearer recognition of how external competition now intersects with domestic policymaking.

With supply chains reorganizing, geopolitical frictions multiplying and technological rivalry intensifying, China no longer assumes a stable external environment. By integrating economic and trade struggles directly into the macro-policy framework, China is shifting from merely managing shocks to coordinating a comprehensive strategic response. Fiscal, industrial, financial and science-and-technology policies are expected to operate within a unified logic of development, security and competitiveness.

This does not simply reflect defensive posturing. It indicates an effort to construct a policy architecture resilient enough to operate under persistent uncertainty – an architecture that emphasizes institutional stability as the anchor for long-term growth.

Another important shift lies in the language of "optimizing the use of new resources and revitalizing existing ones," together with efforts to enhance the combined impact of stock and incremental policies. This represents a significant evolution in macroeconomic thinking. In the years following the pandemic, countercyclical measures leaned heavily on expanding incremental investment to stabilize demand. Today, however, conditions are different. The economy is settling into a new growth range where large-scale investment alone cannot secure sustainable momentum; local governments face tightening fiscal constraints; and structural upgrading demands more efficient resource allocation rather than sheer expansion.

Consequently, policymaking is moving from the logic of "additional stimulus" to one of "improving efficiency." This means making fiscal spending more targeted, accelerating the use of idle assets, improving the quality of investment projects, and promoting freer movement of labor, capital and data. The monetary stance, accommodative but with an eye toward guiding prices back to a more reasonable level, serves both to stabilize expectations and to support moderate growth without relying on emergency-style interventions.

For 2026, three priorities define the policy agenda: expanding domestic demand, fostering new growth drivers and advancing reforms and opening up.

Expanding domestic demand remains central. It aims to strengthen residents' purchasing power, improve consumption expectations and cultivate new consumption sectors such as smart living, green products and health-related services. Enhancing social security and improving income distribution are intended not only to boost households' capacity to spend, but also their willingness to do so. Building a more robust domestic market is viewed as essential for cushioning external shocks and generating a more sustainable growth cycle.

Innovation receives even greater emphasis. Terms such as new-quality productive forces, AI governance and industrial innovation appeared frequently in the conference's directives. Advanced manufacturing, green and low-carbon transitions, and the digital economy will remain central areas for policy support. The conference also called for stronger coordination between technology, industry and finance – recognizing that breakthroughs in emerging fields require coherent support across the entire innovation chain.

Reforms and opening up are expected to enter a new stage focused on institutional upgrading. Planned measures include deeper reforms of state-owned enterprises, faster progress in factor market reforms and legislative steps toward a unified national market. On the external front, China intends to further expand rules-based opening and strengthen alignment with international regulatory norms. This suggests that future competitiveness will rely more on institutional quality and rule-of-law frameworks rather than on periodic stimulus or administrative mobilization.

Risk prevention – long a core element of China's economic governance was again highlighted. The conference called for prudent handling of real estate, local government debt and reforms to the housing provident fund system. The emphasis was not on aggressive intervention but on preemptive, carefully sequenced measures that can prevent systemic risks from accumulating. This forward-looking stance reflects a broader shift from reactive stabilization to structural risk management.

The timing of this meeting gives it additional strategic significance. China is moving from a period of adjustment into a phase of structural upgrading. The 14th Five-Year Plan (2021-2025) is nearing completion, and planning for the next cycle is underway. Policies introduced now must therefore strike a delicate balance: maintaining steady growth while accelerating economic restructuring; deepening openness while managing security pressures; addressing near-term demand weakness while safeguarding long-term competitiveness.

Taken together, the 2025 Central Economic Work Conference sends a steady and coherent message. In a world marked by accelerating uncertainty, China seeks to stabilize its economic fundamentals through prudent macro policy; to sustain long-term development through reform and institutional innovation; to strengthen structural momentum through science and technology; and to guard against systemic risks with more disciplined and forward-looking governance. The overarching goal is clear: to reinforce the foundations of high-quality development and create greater certainty for China's future in an increasingly unpredictable global environment.

(Cover: A view of the Lujiazui area in east China's Shanghai, November 20, 2025. /VCG)