Faced with global sluggishness, the Central Conference on Economic Work now establishes the internal market and innovation as pillars of resilience.
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(Xinhua/Xie Huanchi) |
The Chinese capital was, on December 10 and 11, the scene of a major event for the global economic future: the annual Central Conference on Economic Work (hereinafter referred to as the Central Conference). Bringing together leaders of the Chinese Communist Party (CCP) and government officials, this annual high-level meeting is not just a formal exercise, but is part of the Chinese economic planning process reflected in the five-year plans. It defines the economic priorities for the next twelve months after analyzing the performance of the past year as well as internal and international challenges.
Traditionally considered by economists, investors and foreign governments as a barometer and key indicator of China’s strategic priorities, the Central Conference defines the main directions in terms of growth, structural reform, monetary and fiscal policy, as well as market regulation.
This edition was of particular importance. Held in late 2025, on the heels of the 4th Plenary Session of the 20th CPC Central Committee, the Central Conference celebrated the completion of the 14th Five-Year Plan. By closing this cycle, it has in fact laid the first foundations of the 15th Five-Year Plan (2026-2030).
In his speech, General Secretary of the CPC Central Committee Xi Jinping took stock of the national and international economic situation, and set specific guidelines for the growth trajectory for the year 2026.
Reorientation towards the domestic market
The Central Conference prioritized supporting Chinese domestic demand to face two challenges. On the one hand, in a context of global geopolitical changes, China can no longer rely solely on external demand to drive its growth. On the other hand, in order to essentially achieve socialist modernization, economic development must now align more closely with the aspirations and expectations of the population.
The Central Conference held that the year 2025 and the 14th Five-Year Plan were successfully completed. Despite an uncertain international environment and “complex structural adjustments”, the world’s second-largest economic power shows certain strength, with GDP growth of 5.2% year-on-year over the first three quarters of 2025. The Central Conference stressed that “the world is optimistic about China’s continued development potential”.
However, while Chinese productive supply remains abundant, it now faces weak external demand.
Faced with this observation, the Central Conference placed emphasis on supporting domestic demand as the main engine of growth and on building a robust domestic market.
Three clear political signals emerged from this conference. First, the focus was on “improving quality and efficiency”. This represents a real paradigm shift in Chinese production offerings, moving from the quest for quantity to an objective of quality and precision.
Then, the economy will be based on the consolidation of a powerful internal market. To put it on a healthier and more sustainable trajectory, public policies will focus on raising incomes and relieving the pressure that Chinese economists have termed “involution” (neijuan) – a phenomenon of heightened competition weighing on Chinese society.
Finally, China intends to establish a virtuous circle of investment: a quality offer will stimulate demand which, in turn, will trigger new productive investments. In this plan, financial institutions will strengthen their support for domestic demand, scientific and technological innovation and micro, small and medium enterprises.
Concerning risk management, the Central Conference advocated proactive intervention on two worrying subjects. In real estate, the time has come for a slowdown in new projects in favor of the absorption of existing stocks and the move upmarket of housing. As for the debt of local authorities, it will have to be addressed via market-driven restructuring.
An anchor of stability in the face of global uncertainties
Chinese financial institutions will strengthen their support for domestic demand, scientific and technological innovation and micro, small and medium-sized enterprises. On the demand side, specific measures will be taken to stimulate consumption by increasing the income of urban and rural populations. On the supply side, emphasis will be placed on increasing the quality of goods and services.
China reaffirmed its commitment to maintaining the stability of the renminbi exchange rate at “a reasonable and balanced level.” It must be understood that it does not wish to carry out devaluations of its currency which would give a competitive advantage to its exports, nor to allow an excessive appreciation to occur which would weigh on its economy.
This position is, for companies considering investing in China, a favorable signal which would protect them from exchange risks on their return on investment forecasts.
It is worth noting that China’s economic governance process is reassuring to global economic players. The planning has proven itself in view of Chinese growth figures and the rise in the population’s standard of living since the policy of opening up and reform. The results of the annual Central Conferences demonstrated that its signals were accompanied by real credibility and not utopias not followed by effects.
The latest Central Conference confirms the positive long-term trajectory of the Chinese economy. Compared to certain liberal economies more vulnerable to internal and external fluctuations, the Chinese system allows for greater coherence and control, thus providing an anchor of stability to an uncertain world. The prospects outlined for 2026, the start of the 15th Five-Year Plan and the objectives for 2035 constitute an engine of stability for global growth.
By consolidating its domestic demand, China will offer the world a dynamic market and a stable outlet. The complete chain of Chinese industrial fabric and its capacity for innovation will be valuable aids for global development, in particular for new sectors such as the low-carbon transition and the digital economy.
China is establishing itself as an essential growth pole for global economic recovery and innovative development. If it remains the factory of the world, it is now also establishing itself as a laboratory of ideas, while positioning itself as a messenger of global peace and prosperity.
*JEAN PÉGOURET is a French sinologist and geopolitologist, president of Saphir Eurasia Promotion.
