This article is from Chuanyue Global Macro, authored by the Guolian Minsheng Macro Team.
Tao Chuan believes that the following new developments are worth noting: First, the shift toward a range-based growth target, providing the clearest signal yet of a transition from 'quantity' to 'quality.' The previous 'around 5%' has been adjusted to '4.5%-5%,' indicating that by accepting a phased slowdown in growth, space is being created for high-quality development and structural reform, allowing economic growth to align more closely with potential growth levels. Second, changes in the layout of major projects also reflect the emphasis on 'quality.' Third, industrial deployment is accelerating, potentially advancing along two main lines: 'optimizing existing assets' and 'breaking through in incremental areas.' Fourth, improving people’s livelihoods strengthens the sense of achievement associated with growth.
As the government work report for the opening year of the '15th Five-Year Plan,' this year's economic work strategy presents a different perspective compared to previous years — planning for China’s economy over the long term and promoting economic transformation with greater resolve. Based on this perspective, our focus on quantitative targets has somewhat diminished, while the emphasis on qualitative requirements has become more pronounced.
Internationally, the addition of 'coordinating domestic and international priorities' in socioeconomic development goals aims to stabilize the external economic environment under the guidance of a new round of summit diplomacy; domestically, the growth target for the opening year aligns broadly with the long-term vision for 2035, leaving room for structural adjustments, risk prevention, and reform promotion, while laying a solid foundation for better development later on. Specifically, some new developments are worth noting:
First, the shift toward a range-based growth target provides the clearest signal yet of a transition from 'quantity' to 'quality.' The adjustment from the previous 'around 5%' to '4.5%-5%' indicates that by accepting a phased slowdown in growth, space is being created for high-quality development and structural reform, allowing economic growth to align more closely with potential growth levels. Through the fiscal deficit target, we estimate that the implied GDP deflator is between 0-0.5%, an improvement compared to last year, suggesting higher demands for 'price stability' in 2026.
Second, changes in the layout of major projects similarly reflect the weight given to 'quality.' Compared with the '14th Five-Year Plan,' in the list of key projects under the '15th Five-Year Plan,' there is a significant increase in the proportion of new productivity projects related to emerging industries, new tracks, and cutting-edge technology breakthroughs, forming a core pillar for 'enhancing quality and efficiency.'
Meanwhile, the share of livelihood projects remains relatively high, reflecting a development logic centered on people’s welfare; green and low-carbon projects have steadily increased. Considering that quantified carbon emission targets during the '15th Five-Year Plan' period have not been significantly lowered, green and low-carbon initiatives remain a key focus, laying a solid foundation for achieving the carbon peak goal before 2030.
Third, industrial deployment is accelerating, potentially advancing along two main lines: 'optimizing existing assets' and 'breaking through in incremental areas.' Traditional industries focus on 'renewal and quality improvement,' tapping potential through equipment upgrades and digital-intelligent transformation; future-oriented industries emphasize 'seizing high ground,' cultivating new tracks through open scenarios and patient capital, with key deployments in frontier areas such as future energy, quantum technology, embodied intelligence, brain-computer interfaces, and 6G.
Fourth, improving people’s livelihoods reinforces the sense of achievement tied to growth. Compared to the Central Economic Work Conference in December last year, the priority of 'intensifying efforts to ensure and improve people’s livelihoods' has been moved forward, replacing green development as the top priority. Promoting high-quality full employment, enhancing education quality, and strengthening healthcare services have become key focuses of people’s livelihood work.
The people-centered approach is highly consistent with the concept of 'correct performance orientation.' The essence of correct performance orientation lies in 'achieving results for the people through practical action,' ultimately focusing on the people’s sense of gain and happiness. 'Deepening people’s welfare holds special significance for laying a good start and foundation for the grand journey of the '15th Five-Year Plan.' Under the guidance of the correct performance orientation, supporting development with people’s welfare as its cornerstone represents the most solid base color for the start of the '15th Five-Year Plan.'
Under the requirement of 'quality,' the coordinated cooperation between monetary and fiscal policies has become increasingly critical. The monetary policy continues with a moderately accommodative overall tone, providing support for credit expansion and real economy financing through reserve requirement ratio cuts, interest rate reductions, maintaining reasonable and sufficient liquidity, and leveraging targeted structural tools. However, the transformation of monetary easing into effective credit still depends on complementary loosening measures on the demand side. Monetary easing alone is insufficient to sustain an effective expansion of actual credit; thus, promoting the synergy between fiscal and monetary policies and enhancing the overall effectiveness of macroeconomic regulation have become top priorities for the next phase.
Between monetary easing and fiscal stimulus, which should come first? Strengthening the coordination of fiscal and monetary policies hinges on clarifying their respective roles and division of labor: monetary policy focuses on indirect guidance and creating a suitable financial environment, while fiscal policy directly stimulates effective demand and activates the vitality of micro entities. Their coordination implies that macroeconomic regulation will highlight a pattern where fiscal policy takes the lead and monetary policy plays a supporting role. Monetary policy will primarily serve as a support and complement to fiscal policy rather than taking precedence or replacing it. Through precise alignment in terms of total volume and structure, policy synergy can be formed to jointly promote the 'quality enhancement and efficiency improvement' of the macroeconomy.
The core of fiscal policy playing a leading role lies in 'investing in people.' Although this year’s fiscal deficit target remains unchanged at around 4%, from the allocation of fiscal funds, there is 'a greater focus on supporting consumption stimulation, investing in people, and ensuring livelihoods.'
Editor/KOKO