China will expand its financial spending base in 2026

China commits to expanding fiscal policy spending capacity in 2026, signaling a clear intention to maintain the government's supportive role to promote growth amid a challenging external environment.

According to the Chinese Ministry of Finance, Beijing will intensify targeted investments in priority areas such as advanced manufacturing, technological innovation, and human resource development. This orientation was announced after the year-end work conference to establish fiscal policy priorities for the coming year.

This move indicates that China is leaning more towards fiscal policy to stabilize growth, in the context of prolonged real estate market weakness and increasing external pressures, while the room for monetary easing becomes increasingly limited.

Officials emphasized that domestic demand is the “core driver” of growth, and also committed to increasing household income, stimulating consumption, standardizing tax incentives, optimizing government bond issuance tools, and continuing support for nationwide consumer appliance replacement programs.