China has pledged to accelerate fiscal spending and adopt “incremental policies” that boost economic growth in the second half of 2026 after the second quarter brought a worse-than-expected slowdown.
The second-quarter economic growth of 4.3 per cent was its slowest in more than three years, missing the lower end of a full-year target of 4.5 per cent to 5.0 per cent.
The top decision-making body of the ruling Communist party, the Politburo, acknowledged “difficulties and challenges facing the economy” at its meeting, the official Xinhua news agency said on Thursday.
It also vowed to step up efforts to boost domestic demand, but without specifying the steps, the agency said.
Beijing’s appetite for stimulus to spur the economy remains limited as it tries to curb industrial overcapacity feeding underlying deflationary pressure, while also pressuring indebted local governments to keep spending within their means.
The Politburo signalled it would “continue to comprehensively rectify ‘involution’ competition”, using a term that describes price wars among manufacturers fighting for market share at the expense of profits.
Many economists believe that accelerating already-budgeted national infrastructure projects can stabilise growth in coming months without widening the fiscal deficit.
China must “accelerate the pace of fiscal expenditure”, the meeting said, a summary of the discussion showed.
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