China’s Ministry of Finance used its year-end work meeting to signal that fiscal policy in 2026 will stay “more proactive,” with spending aimed at lifting domestic demand and building new growth engines. The message, reported by Reuters as more proactive in 2026, comes as trading partners push Beijing to rebalance away from exports and as the property downturn continues to sap confidence at home.
The “who” is straightforward: Finance Minister Lan Fo’an and the finance ministry are setting priorities for the first year of the 15th Five-Year Plan period (2026–30). The “what” is a clear pivot in emphasis. Officials said they will “vigorously boost consumption,” “actively expand effective investment,” support tech innovation, and strengthen the social safety net, including healthcare and education. China Daily also highlighted plans to expand fiscal expenditure and refine the mix of government bond instruments to improve effectiveness, alongside efforts to improve transfer payments to local governments, according to fiscal priorities for 2026.
Two numbers frame the stakes. Reuters reported advisers and analysts expect China to keep a growth target of around **5%** in 2026, implying continued policy support if deflationary pressure persists. Separately, China Daily cited Sichuan as a case study where retail sales reached **2.64 trillion yuan** from January to November, up **5.5%** year on year, illustrating the kind of consumption momentum Beijing wants to replicate nationally.
Why now. The external environment is uncertain, and the domestic property slump has become a confidence problem as much as a construction problem. Policy makers are trying to shift demand toward households and high-value manufacturing. The “how” is likely a blend of higher central spending, targeted bond issuance, and more support for innovation, green transition, and urban-rural integration, while also tightening oversight of local-government debt risks.
For businesses and investors, the key is whether fiscal support translates into a broader domestic-demand rebound rather than another narrow industrial push. Watch for concrete quotas on special bonds, consumption-support programs, and any visible improvement in household sentiment as the plan year approaches.
