China is signaling a proactive approach to its economic trajectory for 2026, with significant policy adjustments aimed at bolstering domestic demand and fostering strategic industrial growth. The nation is set to implement a series of measures, including substantial consumer subsidies and targeted tariff reductions, to navigate evolving global economic landscapes and enhance its competitive edge.
Proactive Macroeconomic Policies and Consumer Support
In a move to shore up demand and cushion against external economic pressures, China has announced initial public spending plans totaling $51 billion for 2026. A significant portion, approximately 295 billion yuan ($42 billion), will be front-loaded to support national strategic and security initiatives, alongside central government budget investment plans. Furthermore, an initial $9 billion has been allocated for consumer subsidies, signaling a strong commitment to boosting domestic consumption.
Strategic Tariff Adjustments for 2026
China’s State Council has released its 2026 Tariff Adjustment Plan, which includes updates to import and export tariffs on a wide array of goods. The plan prioritizes the development of key industries, particularly those in high-end technology, the green transition, and healthcare. This involves provisional import tariff reductions on 935 product categories, effective January 1, 2026. These reductions aim to support the development of “new quality productive forces,” enhance living standards, and promote high-level opening up.
Tariff cuts will specifically benefit critical components for advanced materials, aviation, lithium-ion batteries, renewable energy, and semiconductors. For instance, tariffs on carbon fiber prepregs for aircraft construction will be lowered significantly. Similarly, reductions are planned for components essential for battery production, such as recycled black powder for lithium-ion batteries, supporting China’s ambitious renewable energy targets.
The healthcare sector will also see tariff reductions on medical equipment and diagnostic materials, aiming to improve healthcare standards and access to advanced treatments. New tariff lines are being added to the schedule to better classify and support emerging sectors like intelligent biomimetic robots and bio-aviation kerosene, reflecting China’s focus on technological advancement and sustainable development.
Conversely, import tariffs on certain commodities, including micro motors, printing machines, and sulfuric acid, will see their Most Favored Nation (MFN) rates restored. This measure is intended to enhance the productivity of domestic industries in response to shifts in supply and demand.
Trade Agreements and Export Tariffs
China will continue to apply conventional tariff rates to goods from 34 countries and regions with which it has Free Trade Agreements (FTAs), including those under the Regional Comprehensive Economic Partnership (RCEP). Preferential tariff treatment will also be maintained for 43 least-developed countries. Export tariffs will remain in place for 107 commodities, with 68 of these subject to provisional export tariff rates.