China’s State Council has called for stronger countercyclical economic policies and encouraged local governments to pilot measures aimed at increasing domestic consumption as Beijing responds to slowing growth and weak consumer demand.
Premier Li Qiang chaired the State Council executive meeting on September 28, which called for more effective implementation of existing policies and the preparation of additional measures to support economic activity. The meeting said China should intensify macroeconomic adjustment in response to emerging challenges and promote “innovation-driven, high-quality and sound economic development”.
The central government said it would continue preparing measures to stimulate domestic demand, including policies with broader economic effects, while encouraging local governments to test measures first where conditions permit. The meeting also called for policies to stabilise the property market, promote employment and increase household incomes.
The renewed focus on consumption follows weak retail activity. China’s retail sales of consumer goods rose 0.4 per cent year on year in August, after increasing 0.6 per cent in July. Official data showed that retail sales increased by 1.1 per cent in the first eight months of the year, while sales excluding automobiles rose 2.7 per cent.
Economic growth has also lost momentum. Gross domestic product expanded 4.3 per cent year on year in the second quarter, compared with 5 per cent in the first quarter. Growth for the first half of 2026 stood at 4.7 per cent, according to the National Bureau of Statistics.
The State Council meeting placed particular emphasis on “efficient investment”. It called for faster implementation of interest-subsidy policies designed to expand investment and consumption, accelerated issuance and deployment of different categories of government bonds, and the rapid launch of major projects under the country’s 15th Five-Year Plan. It also called for the renovation of ageing reservoirs and grain storage facilities.
The government said fiscal spending should be better organised and that unused local government debt quotas should be put to effective use. It also called for timely adjustments to monetary-policy tools and increased relending support for technological innovation, technological upgrading, agriculture and small businesses.
The meeting comes as policymakers face concerns over the transmission of earlier measures into the wider economy. Goldman Sachs said in a report cited in the source that fiscal policy remained a drag on growth and domestic momentum had stayed subdued, while implementation of planned measures by local governments had been slow.
The investment bank expected China’s real GDP growth at 4.4 per cent in the third quarter. It also argued that pressure on local government finances would constrain the scale of additional easing, pointing instead towards more targeted measures through fiscal and credit channels.
The State Council also discussed environmental regulation, calling for tighter controls on “new pollutants”, including persistent chemicals. Priority industries are to be screened, a dynamic list of substances under key control is to be published, and the registration system for new chemical substances is to be enforced.
The meeting further approved draft regulations concerning public institutions. Their supervising bodies would be held accountable, while public-interest services provided by hospitals, schools and other institutions would be evaluated to ensure that they remain focused on their public missions.
