XiPrioritizesDomesticDemandandTechIndependencein2026Agenda

Xi Jinping attended the Central Economic Work Conference in Beijing on Feb. 10–11. Photo: Xinhua

President Xi Jinping has laid out a defensive economic blueprint for 2026 centered on technological self-reliance and domestically powered growth, underscoring a strategic retrenchment as China confronts entrenched global trade barriers.

In an article scheduled for publication Monday in Qiushi, the Chinese Communist Party’s flagship theoretical journal, Xi elaborated on policy priorities first outlined at the Central Economic Work Conference in December 2025. He characterized the year’s economic environment as complex and challenging, urging officials to reinforce structural foundations rather than pursue short-term stimulus.

While economic tasks are numerous, Xi said, policymakers must “grasp the key levers that move the whole system,” signaling a focus on core drivers over piecemeal fixes.

At the heart of the strategy is a renewed emphasis on the domestic market. Xi called for building a “Buy in China” brand to retain consumption that might otherwise shift overseas. He also urged the removal of what he described as unreasonable restrictions in sectors including tourism and eldercare services.

The policy agenda includes raising basic pensions for both urban and rural residents and formulating measures to increase household incomes — an implicit acknowledgment that subdued consumer confidence continues to weigh on the recovery.

Addressing concerns voiced by manufacturers and foreign investors alike, Xi criticized the phenomenon known in China as “involution,” a term used to describe excessive, low-quality competition in which companies undercut one another in shrinking markets. He directed regulators to curb destructive price wars and accelerate the creation of a unified national market, suggesting authorities could set regulatory guardrails to prevent margin-eroding competition.

As the U.S. and allied governments tighten export controls on advanced semiconductors, Xi reiterated that technological innovation remains the principal engine of industrial upgrading. The article calls for fostering what Beijing terms “new quality productive forces,” highlighting frontier sectors such as next-generation energy, embodied artificial intelligence and the deeper integration of AI into manufacturing.

Such priorities align with China’s broader push to harden supply chains against Western sanctions.

The property sector — once a primary engine of growth — remains central to risk containment efforts. Xi endorsed expanded local government purchases of unsold commercial housing inventory for conversion into affordable housing, a destocking initiative intended to stabilize falling home prices. He also emphasized the importance of managing local government debt to avert systemic financial risks.

Xi reaffirmed that China would not retreat from opening up. The article urges officials to expand cooperation with emerging economies and upgrade cross-border e-commerce models, as Beijing seeks to diversify trade channels amid narrowing access to North American markets.