Chinese authorities identify weak domestic demand as a major economic challenge

Chinese authorities identify weak domestic demand as a major economic challenge
China plans new stimulus measures amid weak demand

​China's National Development and Reform Commission (NDRC) has identified insufficient domestic demand as one of the country's key economic challenges. The agency plans to stimulate private investment and prepare additional business support measures for 2027.

According to an NDRC statement issued on November 6, agency head Zheng Shanjie discussed the economic outlook with executives from private companies. Participants reviewed the main obstacles to growth and policy proposals for the coming year.

According to the National Bureau of Statistics, retail sales in China increased by just 1.1% year over year in the first nine months of 2026. Consumer spending remains weak amid external economic uncertainty.

China plans to boost private investment

Zheng Shanjie said the country needs to withstand external shocks and address the imbalance between abundant supply and insufficient demand.

To achieve this, the NDRC plans to encourage private investment, accelerate major projects, and strengthen economic monitoring. The agency will also continue developing support measures for 2027.

Business representatives at the meeting proposed expanding private companies' access to financing and providing additional support for energy supplies.

Participants also urged authorities to tackle disorderly and irrational competition. Such practices put additional pressure on companies amid limited growth in consumer spending.

Specific details of the new stimulus measures have not yet been disclosed. Business proposals will be taken into account when preparing economic policy for next year.

Weak demand increases China's dependence on exports

Limited domestic consumption complicates conditions for Chinese manufacturers, which continue to rely on overseas markets as an important source of revenue.

At the same time, exporters face currency risks. A stronger yuan could reduce the profitability of overseas shipments, while trade disputes with other countries create additional uncertainty.

Chinese authorities are seeking to balance external pressure for a stronger national currency with the need to maintain export competitiveness.

The situation is complicated by domestic demand remaining insufficient to support economic growth. As a result, exchange rate movements could have a greater impact on the profitability of companies focused on international markets.

Earlier, we reported that the Chinese Communist Party had tightened internal party controls ahead of a leadership transition. Personnel purges became part of broader political changes affecting the country's governance system.

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