China economy 2026: Xi to push for proactive macro policies after industrial slump

China has announced plans to implement proactive macro policies in 2026, aiming to boost the overall economy and shore up long-term sustainable growth.

The announcement comes as China's industrial sector experienced the steepest fall in profits at a record pace over a year, showing signs of weakening domestic demand and persistent deflation.

According to the National Bureau of Statistics’ data, in November the profit fell 13.1 percent from a year earlier after a 5.5 percent decline in October.

The state media CCTV also quoted President Xi Jinping’s expectations related to Beijing’s growth target this year. Xi declared that China is set to achieve a growth target of about 5 percent in 2025.

Xi said in his address at a New Year’s party, the economy is expected to reach 140 trillion yuan or $20 trillion in 2025.

"Our country's economy is expected to move forward under pressure...showing strong resilience and vitality. The country will promote effective qualitative improvement and reasonable quantitative growth in the economy,” Xi said in his speech.

Xi’s recent speech highlights the government's resolve to implement robust measures in a bid to increase people’s incomes, boost growth-driven investments, and boost consumption.

Recently, the government has reserved 62.5 billion yuan from a special treasury for local governments to fund and support its consumer goods trade-in scheme for 2026.

China’s state planner has also unveiled investment plans for two major construction projects, including 295 billion yuan in central budget funding. The move aims at uplifting economic outlook and investment.

Towards year-end, China’s industrial growth has been hindered by various driving factors, including weak domestic demand, decline in fixed-asset investments, factory-gate deflation, prolonged property crisis, sector-specific decline, and structural adjustments in midst of volatility.