China's cabinet, led by Premier Li Qiang, announced on September 28, 2026, a commitment to intensify counter-cyclical policy support to address economic challenges and ensure the achievement of the country's annual growth target. The State Council emphasized the need for more effective implementation of existing policies and an acceleration in the issuance and utilization of government bonds. This move signals a heightened urgency to shore up economic growth, which saw a slowdown to 4.3% in the second quarter, accompanied by softening industrial output, retail sales, and investment in the early part of the third quarter.
The new policy directives include a range of measures designed to boost investment and consumption. The government plans to optimize fiscal spending, make better use of unused local government debt capacity, and flexibly employ monetary policy tools. Specifically, there will be an expansion of re-lending facilities for technological innovation, industrial upgrading, agriculture, and small firms. The cabinet also committed to studying and introducing new policies to stabilize the real estate market and promote employment and income growth among residents.
Key policy deployments include pushing for the early commencement of major engineering projects outlined in the "15th Five-Year Plan" and the "Six Networks" implementation schemes. The government will also accelerate the issuance and use of various bonds and promote the renovation and upgrade of old reservoirs and grain depots. Furthermore, it aims to stimulate private investment by improving project preparation, ensuring resource guarantees for investment projects, and increasing the efficiency of investment approval processes.
Economists anticipate that these measures could include further cuts to the reserve requirement ratio (RRR) and interest rates. Analysts note that there is still over $600 billion in special bond quota available for deployment this year. Potential actions to stabilize the housing market may involve local governments acquiring existing commercial properties for affordable housing, promoting urban village renovations, and supporting "sell old, buy new" initiatives with purchasing subsidies. For income growth, plans include boosting wages, increasing operational income for small businesses and farmers, and diversifying property income sources, alongside strengthening social security measures.
The emphasis is also on continued research and development of robust pro-consumption policies, with a focus on localized and experimental approaches to address regional disparities. This includes exploring flexible holiday schedules, integrating cultural, commercial, and tourism activities, and supporting key demographics like college graduates and migrant workers through vocational training and entrepreneurship. The overarching goal is to ensure that fiscal resources are fully utilized and that monetary policy effectively translates into increased investment, consumption, and real economic demand.
