Government stepping up policy support to drive economic growth

China is stepping up policies to boost domestic demand and consumption this year to ensure it achieves its 2026 growth target and starts the 15th Five-Year Plan (2026-30) period on a strong footing, senior officials said on Friday.

Zheng Shanjie, head of the National Development and Reform Commission, said the strong foundation needed to reach the country's GDP growth target of 4.5 to 5 percent in 2026 is in place, and is supported by the nation's vast economic scale, innovation capabilities and institutional strengths in managing risks.

"China's economic expansion this year could add more than 6 trillion yuan ($869 billion) to output, an increment equivalent to the annual economic size of a developed economy," Zheng said at a news conference for the fourth session of the 14th National People's Congress, China's top legislature.

"Such growth will provide strong support for stabilizing employment, improving people's livelihoods and mitigating risks," he said, stressing that authorities will strengthen macroeconomic support while boosting consumption and investment to secure the growth target.

During the conference, Pan Gongsheng, governor of the People's Bank of China, the country's central bank, vowed efforts to further reduce the reserve requirement ratio of banks and lower interest rates this year, after cutting rates on structural tools in January.

Fiscal push

Meanwhile, Finance Minister Lan Fo'an said that fiscal policy will continue to follow the more proactive stance, maintaining its strength from last year's expansion, with new government bond issuances this year — including central and local government bonds — totaling 11.89 trillion yuan, making it the biggest fiscal push in recent years.

As a special move to stimulate domestic demand, the central government has earmarked 100 billion yuan to roll out a coordinated package of fiscal and financial policies.

According to Lan, the measures include four initiatives targeting private investment and two supporting household consumption — using tools such as interest subsidies, financing guarantees and risk-compensation mechanisms, expected to further amplify the multiplier effect of fiscal spending.

This, in combination with a total of 250 billion yuan allocated for consumer goods trade-ins this year, represents stronger support than last year, the finance minister added.

Commerce Minister Wang Wentao said the consumer goods trade-in program will prioritize green and intelligent products this year, while ensuring stronger support for brick-and-mortar retailers.

China is also piloting new consumption models in 50 cities and expanding market access for foreign investors in sectors such as telecommunications, biotechnology and healthcare, Wang added.

To boost effective investment, Zheng, the NDRC head, said authorities will advance 109 major projects mapped out in the draft 15th Five-Year Plan. Priority infrastructure includes six key networks — water, power, computing capacity, next-generation communications, underground urban pipelines and logistics systems — along with major projects in areas such as integrated transportation, consumption, the low-altitude economy, artificial intelligence plus, education and healthcare.

"Investment in these areas is estimated to exceed 7 trillion yuan this year," Zheng said, adding that another priority will be strengthening China's modern industrial system, including stepping up support for emerging industries and industries of the future.

According to Zheng, the scale of AI-related industries is projected to exceed 10 trillion yuan by the end of the 15th Five-Year Plan period, while the industry built upon the Beidou Navigation Satellite System is expected to exceed 1 trillion yuan. The services sector, meanwhile, is projected to surpass 100 trillion yuan in the coming five years.

Song Yu, chief China economist at UBS Securities, said the authorities appear to be showing lower tolerance for an economic slowdown and are likely aiming for GDP growth close to 5 percent in actual work this year as they push forward long-term modernization goals.

He added that the closer policy coordination underway will help support that objective.

Wang Keju contributed to this story.

Contact the writers at zhoulanxv@chinadaily.com.cn