At the World Economic Forum in Davos, Chinese officials defended the nation's state-driven economic model, highlighting a 5.3% GDP growth target for 2026 and sustained investment in green infrastructure. The remarks come as global investors scrutinize China’s long-term trajectory amid slowing private sector activity.
- China targets 5.3% GDP growth in 2026, backed by state-driven investments.
- Public spending on green infrastructure set to grow 12% annually through 2028.
- Fixed asset investment in digital and manufacturing sectors grew 24% YoY in Q4 2025.
- Local government debt reached 58% of GDP by end-2025.
- CSI 300 Index gained 0.9%; CNH appreciated 0.7% post-speeches.
- Mixed market response: tech stocks dipped despite broader gains.
Chinese representatives delivered a forceful rebuttal to Western critiques of Beijing’s economic approach during a high-profile panel at the 2026 World Economic Forum in Davos, emphasizing resilience in the face of global headwinds. Officials underscored the government's continued role in guiding strategic sectors, citing a planned 12% increase in public spending on clean energy projects over the next three years. This includes expanded investments in high-speed rail, hydrogen fuel centers, and grid modernization across central and western provinces. The defense of China’s development paradigm centered on macroeconomic stability and long-term planning, with officials pointing to a projected 5.3% annual GDP expansion in 2026—slightly above the baseline forecast by international institutions. They referenced a 24% year-on-year rise in fixed asset investment in advanced manufacturing and digital infrastructure during Q4 2025 as evidence of internal momentum, despite softening consumption trends in urban centers. Market reactions were mixed. The CSI 300 Index rose 0.9% by midday following the speeches, while China’s offshore yuan (CNH) strengthened against the U.S. dollar by 0.7%. However, shares in consumer-facing tech firms such as Pinduoduo (PDD) and Xiaomi (1810.HK) saw modest declines, reflecting lingering concerns about domestic demand pressures. International investors remain cautious about the sustainability of state-led stimulus, particularly as local government debt levels exceeded 58% of GDP in 2025. The discussion at Davos highlighted a growing divergence in economic philosophy, with Chinese delegates advocating for coordinated state intervention as a safeguard against volatility, while Western counterparts called for greater market liberalization and transparency. The debate may influence future trade negotiations and capital flows, especially as multilateral institutions reassess lending policies for emerging economies.