Concerns include the mixed record of Chinese firms on labour standards, environmental protection and technology transfer, as well as fears that Chinese exports are crowding out local industries in developing markets, he added.
At the same time, China’s financial firepower is no longer what it was during the early years of the BRI.
While Beijing has delivered major infrastructure projects, it is now less able – or less willing – to commit vast sums of funding, instead recasting the initiative around “small but beautiful” projects, Chong said.
How China navigates these constraints while pursuing its global ambitions in 2026 will shape how credible and sustainable its push to expand influence ultimately proves, he added.
STABILITY OVER STIMULUS
Economic growth will remain a central pillar of China’s agenda in 2026.
After setting its GDP growth target at around 5 per cent for 2025, analysts expect a similar benchmark to be carried into the new year, reflecting Beijing’s preference for continuity and control rather than dramatic recalibration.
China has offered its clearest signal yet of how it intends to steer the economy following its annual Central Economic Work Conference, held in Beijing from Dec 10 to 11.
The agenda-setting meeting, attended by the country’s top leaders, laid out policy priorities for the year ahead.
Analysts said the official readout struck a familiar tone of confidence and resilience, reaffirming commitments to boost domestic demand, stabilise foreign investment and shore up key sectors. The emphasis, they noted, was on fine-tuning policy rather than unleashing sweeping new stimulus.
2026 could clarify the direction of China’s growth model.
“The moment probably marks a crossroads over whether the Chinese leadership truly wants to steer the world’s second-largest economy towards domestic consumption, continue with an export-led model, or persist with a dual-circulation approach,” said Lim Tai Wei, a professor of East Asia at Soka University.
Beijing has stepped up efforts to spur consumption in recent years – from subsidies and trade-in schemes to rhetoric around “new quality productive forces” – partly to offset vulnerabilities stemming from external pressures and persistent supply-side imbalances, Lim noted.
Yet significant headwinds remain.
Analysts said the more pressing challenge lies in deflationary pressures that continue to weigh on confidence.
“Whether the GDP deflator turns positive again will be the most important signal in 2026,” said Gary Ng, senior economist at Natixis and a research fellow at the Central European Institute of Asian Studies.
Looking ahead, Ng expects policymakers to rely on a calibrated mix of fiscal and monetary tools to cushion growth at the margins, but sees little appetite for a large-scale stimulus push.
“The pressure will be tougher next year with a range of problems,” he said.
“However, the likelihood of a major stimulus remains low, as policy priorities are more focused on technology and security than on hitting headline GDP targets,” he added.
Source: CNA
