China Reportedly Earmarks $42 Billion For 2026 Projects – Infrastructure, Consumption Take Priority

• These are aimed at improving China's modern infrastructure system and supporting a smooth start to the 15th Five-Year Plan (2026-2030), according to a Reuters report. 
  About 220 billion yuan has been set aside for 281 national and security-related projects, as per the report. 
  In a separate statement, the National Development and Reform Commission said that the country’s top leadership is prioritizing expanding domestic demand as one of its eight key tasks for 2026.

China is reportedly allocating 295 billion yuan ($42.16 billion) in 2026 on an investment plan for the central government's budget and major projects amid the country’s increasing focus on expanding domestic demand and stimulating consumption and investment.

According to a Reuters report from Wednesday, the projects are aimed at improving China's modern infrastructure system and supporting a smooth start to the 15th Five-Year Plan (2026-2030), Li Chao, a National Development and Reform Commission (NDRC) spokesperson, said in Beijing.

The announcement comes even as China’s top leadership lists expanding domestic demand as one of its eight key tasks for 2026, alongside prioritizing the refinement of the “Two New” policies to build a more robust domestic market, as per a separate statement from NDRC.

Investment Allocation

Li Chao, a spokesperson for the National Development and Reform Commission, said in Beijing that about 220 billion yuan has been set aside for 281 national and security-related projects, according to the report.

Additionally, the central government has set aside over 75 billion yuan to fund 673 projects across domains such as ecological protection and carbon reduction.

China's "Two New" policies, namely equipment renewal and consumer goods trade-in, aim to bolster domestic demand while simultaneously improving equipment efficiency to lower emissions. President Xi Jinping reiterated the idea in early 2024 as a way for the government to shift China's growth towards domestic demand while strengthening internal infrastructure, energy, and resource security.

China has also announced the first tranche of 62.5 billion yuan ($8.92 billion) in subsidies, to be provided through the sale of ultra-long special sovereign bonds to local governments, to support the trade-in of consumer goods in 2026.

Future Outlook

The government’s investment plans and 15th Five-Year Plan come as the world’s second-largest economy faces headwinds from a persistent property slump, weak consumer demand, and global trade tensions.

While China’s year-to-date GDP growth came in at 5.2% year-on-year as of December, it is projected to grow at 4.4% in 2026, according to a report from the World Bank, which also believes that the country’s growth in the coming years hinges on the strength of its domestic demand as well as its structural reforms.

The iShares China Large-Cap ETF (FXI), which tracks large-capitalization Chinese equities, has climbed over 25% in the past year. Meanwhile, U.S. equities declined in Wednesday morning’s trade.

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.23%, while the Invesco QQQ Trust (QQQ) edged 0.31% lower. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘neutral’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.10% at the time of writing.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

(1 Chinese Yuan = $0.14)
 

Share

·

Add us on