Published by ChinaMNC ยท Zhaoping
China's Economy in First Three Quarters: Key Takeaways for Foreign Founders
China's GDP grew 4.6% year-on-year in the first three quarters of 2026, with new quality productive forces and expanded domestic demand creating opportunities for foreign founders. Here's what the latest government briefing means for your China operations.
China's Economy in First Three Quarters: Key Takeaways for Foreign Founders
On October 20, China's National Development and Reform Commission (NDRC) held a press conference to discuss current economic issues. For foreign founders registering or operating a company in China, the briefing offers valuable insights into policy priorities and market trends. Here are the key points, summarized for practical use.
Economic Performance: Stable Growth with New Drivers
In the first three quarters, China's GDP expanded by 4.6% year-on-year, despite global geopolitical tensions and natural disasters. The NDRC characterized the economy as "stable, innovative, and resilient."
- Stable: Macroeconomic performance remains within a reasonable range, with stable employment and prices, improving development quality, and better market expectations.
- Innovative: New growth drivers are accelerating. Key achievements include breakthroughs in integrated circuit core technologies, with mature process capacity ranking first globally; AI open-source large models surpassing 10 billion global downloads; humanoid robots accounting for over 90% of global shipments; innovative drug licensing deals reaching $130 billion in the first three quarters, close to last year's total; and new energy vehicle penetration hitting 53.6%.
- Resilient: Economic resilience is strengthening through increased investment in "Two Major" construction (major projects and key infrastructure), enhanced reserves of critical materials, and secure supply chains. Food, energy, and supply chain security have been effectively maintained.
Policy Measures: Supporting Growth and Private Investment
The NDRC is implementing both existing and incremental policies to sustain economic momentum. For foreign founders, these measures signal continued support for business and investment.
- Enhancing existing policies: The government is advancing major projects under the 15th Five-Year Plan and "Six Networks" implementation plans, and introducing private capital into nuclear, hydro, and water conservancy projects. Policies to optimize industrial development and computing infrastructure are being refined. Old reservoirs will be assessed and upgraded, and high-standard grain warehouses will be built or renovated.
- New incremental policies: Recent measures include lowering the pledged supplementary lending rate, increasing re-lending quotas, offering interest subsidies for home purchases, and financial support for the service sector. The government will continue to monitor the economy and introduce new policies as needed to keep growth within a reasonable range.
Domestic Demand: A Key Driver with Untapped Potential
Domestic demand contributed 74.8% to economic growth in the first three quarters. Retail sales of goods and services grew 2.6% year-on-year, and investment in intellectual property products rose 9.3%. The NDRC is drafting an implementation plan for expanding domestic demand (2026-2030) and will push for its early release.
Specific measures include:
- Boosting consumption: Combining livelihood improvement with consumption promotion, increasing public service spending, and expanding direct consumer subsidies. Efforts will support new energy vehicles, smart products, elderly care, childcare, cultural performances, tourism, and sports. Unreasonable restrictions on consumption will be removed.
- Expanding effective investment: Coordinating 109 major projects from the 15th Five-Year Plan with "Six Networks" construction. Ultra-long special treasury bonds and new policy financial tools will be used to support social welfare, technological innovation, industrial upgrading, and security. A long-term mechanism for private enterprises to participate in major projects will be improved, and urban renewal will be advanced.
- Improving institutions: A national unified market regulation will be introduced to unify property rights protection, market access, and other basic rules. Statistics, taxation, and assessment systems will be adjusted to support market integration. Reforms in local government investment and financing models and income distribution will continue.
Private Investment: Opportunities for Foreign-Funded Enterprises
The NDRC recently promoted 88 investment projects to private enterprises in two batches, with plans to attract 31.1 billion yuan in private capital. The Deputy Director of the NDRC's Private Economy Development Bureau stated that future efforts will combine "policies + projects + scenarios" to break down hidden barriers, strengthen factor guarantees, and open application scenarios, enabling private enterprises to invest with confidence.
Foreign founders should note that while these measures target private domestic enterprises, they reflect a broader push to improve the business environment and encourage investment, which can benefit foreign-invested companies as well.
New Quality Productive Forces: Localized and Practical
The Communist Party and State Council recently released the "Opinions on Developing New Quality Productive Forces." The NDRC emphasized that development must be "tailored to local conditions" in three aspects:
- Scientific planning: Localities must thoroughly assess their foundation before planning key industries. The NDRC will coordinate national and provincial special plans for future industries and emerging pillar industries, with provincial authorities overseeing municipal and county plans.
- Leveraging comparative advantages: Projects should be rigorously evaluated to avoid blind investment. For example, given overheating in some hydrogen energy segments, the NDRC is drafting plans to rationally layout major projects based on national strategic needs, technological maturity, and resource conditions, guiding localities to find their niche.
- Standardized and precise support: Localities must use policies in compliance with national unified market rules and avoid practices that trigger "involutionary" competition or vicious investment attraction.
Application Scenarios: A Gateway for Innovation
The NDRC and relevant departments have launched the first batch of 136 landmark major application scenario projects. According to the NDRC spokesperson, these projects aim to accelerate the maturation and application of new technologies, products, and business forms, and to support all types of market entities in sharing development opportunities. For instance, smart mining scenarios will activate resources from over 2,800 mines, providing testing grounds for cloud computing, industrial IoT, intelligent sensing, and autonomous driving.
Foreign founders in tech or industrial sectors may find opportunities to participate in such scenarios, either as technology providers or partners.
Practical Implications for Foreign Founders
Based on the NDRC briefing, foreign founders should consider the following:
- Leverage policy support: Stay informed about incremental policies and existing measures that may benefit your industry, such as financial support for services or investment in innovation.
- Explore domestic demand: With consumption upgrading and investment in intellectual property, sectors like new energy vehicles, smart products, elderly care, and tourism offer growth potential.
- Engage in private investment projects: Although initially targeted at domestic private enterprises, the push to attract private capital in major projects may open doors for foreign-invested enterprises through partnerships or joint ventures.
- Align with new quality productive forces: Ensure your projects align with local conditions and avoid areas of overinvestment or policy red lines.
- Utilize application scenarios: Seek opportunities to test and showcase your technologies in government-backed scenarios, which can provide validation and market access.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.
Call to Action: Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.