Beijing has stopped counting the money; now it is working out how to spend it better
The 2026 Two Sessions confirms a shift in Beijing’s fiscal thinking. After the sharp expansion of 2025, the question is no longer how much to spend but how to spend it wisely. The deficit ratio holds at 4 percent, general public budget expenditure edges up to C¥30 tn, and local special bonds are broadly flat at C¥4.4 tn. After a sharp step-up in 2025, they are now on a high plateau. What has changed is the logic governing which projects get funded and whether the money actually gets out of the door.
fiscal toolkit stepped up in 2025 and held at a high plateau in 2026
from more spending to structured delivery
Beijing is not stepping back from investment-led support in 2026, but nor is it simply reverting to the earlier model of fragmented, locally driven expansion.
This shift builds on dynamics already visible in 2025. The package looked expansionary on paper, but general public budget expenditure fell short of the target, and both total fixed asset investment and private investment were in contraction by year-end. That helps explain why policymakers do not appear to view a further increase in headline fiscal numbers as sufficient to generate a broad or durable upswing.
What stands out in 2026 is a reworked delivery model. The centre is taking on a greater stabilisation role, with local budgets held broadly flat and a deliberate rebalancing of who bears the fiscal weight. At the same time, the investment universe is widening: the 2026 Government Work Report links ‘effective investment’ not just to traditional infrastructure but to new productive forces, new urbanisation and human development.
Three funding channels; three distinct jobs
central budget investment of C¥755 bn plugs gaps and supports weaker-return project
C¥800 bn in special long-term bonds ring-fenced for nationally strategic and security-critical projects
expanded C¥800 bn policy-finance tool acts as project capital, crowding in matching finance and social capital
The real shift in 2026 is how support is structured and delivered, consistent with the lower, more flexible GDP target set for the year. In this sense, the 2026 fiscal stance is not only about scale, but about better-targeted spending and stronger fiscal-financial coordination, notes Luo Zhiheng 罗志恒 chief economist and Chao Yunxia 晁云霞 macro analyst, Yuekai Securities.
Policy coordination matters as much as scale. The goal is coordinated division of labour across channels, built around a common project pipeline to cut fragmentation and accelerate delivery.
A new C¥100 bn fiscal-financial coordination fund for domestic demand adds a further layer. The NDRC pre-allocated funding for 2026 projects at the end of 2025, with the explicit aim of accelerating starts and forming physical workload sooner.
2026 effective-investment support toolkit (C¥ bn)
note: These channels do not map one-for-one into infrastructure capex, as local special bonds are also used for debt management and clearing arrears.
The logic of this shift reflects what the 2025 investment data had already begun to show. There was no broad-based infrastructure boom. Utilities, network and system segments held up, but strip those out and infrastructure investment fell over the full year. The cycle is tilting toward equipment-intensive, network-oriented, system-upgrading projects and away from concrete-heavy expansion.
2025 fixed-asset investment growth by sector
This also helps explain the role of private capital. Policy language still points to broader participation, but the realised pattern of investment suggests that the near-term buildout remains more state-led than that rhetoric implies.
With private investment weakening through 2025 and state-backed projects holding up, the likely carriers of the next buildout are the parts of the state system with funding capacity, planning authority and implementation reach—not a broad private revival or local spread.
where future projects lie
The 15th 5-year plan draft, released on 4 March, provides a clearer framework for the more differentiated delivery model emerging in 2026. One of the notable signals is the emphasis on the ‘six networks’: water, power, computing, new communications, urban underground utility and logistics. In transport, the focus is on strategic corridors and nodes, the ‘eight vertical and eight horizontal’ high-speed rail grid, national expressways, major port clusters and airport groups.
This points to a shift in the logic of infrastructure: away from broad locally driven buildout and towards national networks, resilience and coordination, with favoured projects being those that strengthen these national networks, raise system resilience, support industrial upgrading or ease visible public-service bottlenecks.
The project universe is also becoming more concrete. The plan’s 109 major projects include 23 under modern infrastructure systems. Investment in integrated transport, low-altitude infrastructure, AI+, education and medical facilities and related fields in 2026 is preliminarily estimated at more than C¥7 tn, according to Zheng Shanjie 郑栅洁 NDRC director.
Better coordination, phased rollout and alignment between digital and physical infrastructure systems, not overbuilding, is what ‘appropriately ahead of demand’ means in practice, notes Zhang Haiyi 张海懿 CAICT (China Academy of Information and Communications Technology) DG.
The C¥7 tn-plus figure spans fiscal, quasi-fiscal and state-led channels, and should be read as a policy-guided investment universe rather than a narrow fiscal-spending line. Central SOEs completed C¥5.1 tn of fixed asset investment in 2025 alone; State Grid plans roughly C¥4 tn over the 15th 5-year plan period. The current buildout is increasingly a state-system capital spending story, not a budget story.
The clearest hard anchors sit in energy and digital infrastructure
around 100 GW of new pumped-storage capacity
offshore wind above 100 GW
nuclear operating capacity around 110 GW
west-to-east power transmission above 420 GW
1 mn 50G PON ports and 500,000 5G-A base stations
selective pool of 109 national projects outlined in 15th 5-year plan
Beijing has stopped reaching for bigger numbers. The 2026 bet is that a tighter, more centralised investment regime can do what headline expansion could not. Scale had its moment. Now what is needed is discipline and centre-local joined-up thinking.
macroecon experts
Han Wenxiu 韩文秀 | Central Financial and Economic Affairs Commission deputy director
Han is less a sector specialist than a representative voice to understand how the current leadership is framing the 15th 5-year plan as a whole. In his March 2026 remarks, Han presented the plan as a longer-term framework centred on deeper integration between technological and industrial innovation, stronger domestic demand and a clearer hierarchy of strategic tasks and major projects. His comments are useful for showing how infrastructure is being repositioned inside a broader national development agenda rather than treated as a stand-alone stimulus lever. In that sense, Han’s role is to signal priorities, sequencing and political intent more than to debate individual instruments.
Veteran economic researcher and policymaker, Han started as an editor at a Peking University Journal, rising through a series of roles at the National Development and Reform Commission. He served as a Deputy Director of the State Council’s Research Office and later became a Deputy Director of the Central Financial and Economic Affairs Commission Office. He is a member of the 20th CPC CC, Principal Deputy Director of the Central Financial and Economic Affairs Commission Office, and the Director of the Central Rural Work Leading Group Office.
Luo Zhiheng 罗志恒 | Yuekai Securities chief economist
Luo is one of the clearest ‘structure-first’ voices in the PRC fiscal debate. He argues that the core problem is not debt size in itself, but debt structure, maturity mismatch, funding efficiency and liquidity pressure. This framing runs through his work on local government finance, LGFV reform and central-local fiscal relations and helps explain why he reads macro policy less through headline totals than through how liabilities, incentives and transmission channels are being reorganised.
Extending this logic to 2026, he sees the current fiscal stance as one of ‘expansion in force, optimisation in structure and innovation in tools’, with greater emphasis on coordinating fiscal spending with policy finance. He warns that without improving transmission, additional fiscal support may not translate into sustained demand, underscoring the importance of aligning funding channels with viable project pipelines and real economic returns.
Luo took a doctorate in economics at the MoF-affiliated Chinese Academy of Fiscal Sciences. He is now chief economist at Yuekai Securities and a frequent commentator on fiscal reform, local government debt and macro stabilisation. He regularly advises the central leadership and joins roundtables organised by central agencies like NDRC and MoF.
Zhang Haiyi 张海懿 | CAICT Technology and Standards Research Institute director
Zhang translates ‘new infrastructure’ from slogan into system design. She frames it in terms of network quality, standards, optical transport and industrial application. In her 2026 works, she addresses how themes such as ‘city-level millisecond computing access’, ‘network-strengthening computing’ and ‘all-optical transmission’ are ways to embed AI and digital infrastructure within a broader modern industrial and infrastructure system. Infrastructure in these crucial areas to be built ‘appropriately ahead of demand’ should not be equated with broad capacity expansion or overbuilding. Instead, she emphasises coordinated and phased deployment in digital and communications infrastructure, where timing, standards and interoperability are critical.
Zhang leads the technology and standards research institute at China Academy of Information and Communications Technology (CAICT). Working at the intersection of telecoms policy, standards and industrial strategy, she is a leading voice for understanding how Beijing expects digital infrastructure to connect with manufacturing upgrading, network coordination and the broader push for new productive forces.
context
22 Mar 2026: Han Wenxiu highlights investment space in urban renewal and new infrastructure at China Development Forum 2026
12 Mar 2026: NPC closes and approves the 15th 5-year plan draft outline, and the 2026 fiscal budget plan
12 Mar 2026: National Development Planning Law adopts the 14th NPC
06 Mar 2026: NDRC press conference highlights ‘six networks’ and estimated C¥7 tn infrastructure buildout in 2026
05 Mar 2026: NPC approves 2026 Government Work Report set C¥755 bn budget investment and C¥800 bn ‘two major’ bonds
04 Mar 2026: CPPCC opens, beginning the formal Two Sessions process for the first year of the new plan period
27 Feb 2026: Politburo reviews the draft Government Work Report and draft 15th 5-year plan outline ahead of the Two Sessions
22 Dec 2025: MoF briefing on 14th 5-year plan fiscal outcomes signals stronger fiscal macro-control and reform in the next plan period
09 Jan 2026: central financial mouthpiece stresses ‘policy integration’ as a core macro task for 2026
23 Dec 2025: Central SOEs meeting stresses role in strategic infrastructure and supply chains
22 Dec 2025: State Council meeting on 15th 5-year plan emphasises major projects
11–12 Dec 2025: Central Economic Work Conference sets the macro policy tone for 2026 and calls for a good start to the 15th 5-year plan period