Reform policies deliver optimism

China's push toward high-quality development is gaining momentum as deepening reforms and continued structural transformation strengthen the foundations for more sustainable growth, financial sector professionals said.

"If we look at what we saw in the directives in the fourth plenum for the 15th Five-Year Plan (2026-30), the country wants to continue focusing on high-quality development in terms of investing in people and growing domestic consumption, by providing more resources for the social safety net and social protection. All these are very positive steps in the right direction," said Asif S. Cheema, Asian Development Bank's country director for China.

"China already has everything that's needed — be it the commitment from the government, the institutional capacity, as well as a very strong foundation. As long as it continues toward its commitment to reforms, the signs are very encouraging," he said.

During the first 11 months of 2025, China's exports denominated in US dollars grew by 5.4 percent year-on-year to $3.41 trillion, according to the General Administration of Customs.

Cheema said it was encouraging to see robust export performance, particularly in high-quality products, noting that this reflects the strong foundation China has built over the years through a solid manufacturing base, sustained investment in research and development, and supportive government policies promoting innovation and digitalization.

He noted that exports of green products, including electric vehicles, batteries and solar equipment, rose by 20 percent in the first 11 months, while shipments from high-tech sectors such as biotechnology, semiconductors and advanced manufacturing climbed 7 percent.

Exports of high-quality products outpaced overall export growth, he said, indicating that the transformation of China's growth model is already beginning to yield results.

In China's proposals for formulating the 15th Five-Year Plan, policymakers stressed the need to take coordinated steps to expand domestic demand and deepen supply-side structural reform.

With increased urban incomes as well as the need for modern services, there would be plenty of opportunities for foreign companies in this very large and dynamic market, Cheema said, naming three of the major opportunities as the green sector, the services sector and high-quality high-tech manufacturing.

"All in all, I can see that there are plenty of opportunities for foreign companies (in China) as long as they can bring in new technology as well as global best practices, and they have a long-term commitment towards China," he said.

Liu Jing, an economist at HSBC Global Investment Research, said China's economy is expected to continue its structural transformation while maintaining steady growth in 2026, the opening year of the 15th Five-Year Plan.

As imports and exports become more balanced, domestic demand — including consumption and investment — is expected to become the main driver of growth, Liu said in a recent report.

She stressed that expanding domestic demand will be a major policy priority this year.

From a medium — to long-term perspective, HSBC economists believe that services consumption will be a critical growth area.

In a recent article, the National Development and Reform Commission outlined measures to accelerate the improvement of institutional mechanisms for expanding domestic demand, including implementing paid staggered vacations, steadily expanding the scope of free education, and promoting a system under which basic public services are provided based on permanent residence registration.

The steady advancement of these policies will effectively increase disposable incomes for households, especially for new urban residents, providing sustained momentum for consumption growth, said Liu.

Recent policy announcements suggest the government's consumer goods trade-in program will continue in 2026, helping to prevent a sharp drop in retail sales. However, services consumption growth is expected to outpace goods consumption, supported by government initiatives and underlying structural upside, a Goldman Sachs report said on Monday.

With policymakers pledging to "stabilize investment" this year, Goldman Sachs expects gross fixed capital formation growth to rebound from 1.5 percent in 2025 to 3.5 percent in 2026.

jiangxueqing@chinadaily.com.cn