China: Domestic demand push under 15th FYP – HSBC

HSBC’s China macro team reviews January–February 2026 data and the latest National People’s Congress outcomes, highlighting a GDP growth target of 4.5–5.0% for 2026. The bank notes strong Fixed Asset Investment, resilient industrial production, and solid exports, alongside proactive fiscal policy, infrastructure-heavy investment plans, and a clear focus on boosting domestic demand, technological upgrading, and capital market reforms under the 15th Five-Year Plan.

Growth target and policy support

"China’s annual National People’s Congress (NPC) concluded on 12 March, after a week of policy-setting meetings."

"The headline GDP growth target was set as “4.5% to 5% for 2026, with a commitment to strive for even better results in practice”."

"China will maintain a proactive fiscal stance, with the central government absorbing a larger share of spending. This shift is a response to ongoing pressures from weakness in the property market, subdued price levels, and slower tax growth, as well as the need to kickstart the 15th FYP. The government is front-loading fiscal support, accelerating bond issuance, and aiming to implement reforms to align local and central fiscal management."

"Spending priorities are closely tied to long-term goals: boosting domestic demand, advancing technology and industrial upgrading, and safeguarding livelihoods."

"Major projects are set to be the principal catalyst for higher investment. The 15th FYP outlines 109 projects across the “Six Networks” (water, power grids, computing power, communications, pipelines and logistics), as well as transportation, consumption, education, and healthcare infrastructure. These projects are anticipated to drive total investment to over RMB7trn this year, according to the National Development and Reform Commission."

"Government funding will play a significant supporting role, with this investment projected to surpass RMB5trn in 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)