The new orders sub-index dropped to 49.9 from 50.6 in April, while the sub-index on production edged down to 51.2 from April’s 51.5. The sub-index for raw material stockpiles fell to 48.6 from 49.3 in April.
| Photo Credit: Reuters

Chinese President Xi Jinping on Saturday (March 7, 2026) called on the PLA to enhance political loyalty after the recent purge of the top brass of the military, while a top General called on the defence personnel to resolutely obey the Chinese leader’s command.

Meeting a largely condensed delegation of military officials of the People’s Liberation Army (PLA) and the People’s Armed Police Force at the National People’s Congress (NPC), China’s Parliament, Mr. Xi stressed fully leveraging the unique strengths of enhancing political loyalty in the military, the state-run Xinhua news agency reported.

He also called for concerted efforts to modernise national defence and the armed forces in a steady, sustained manner.

This is Mr. Xi’s first meeting after the removal of two senior Chinese military officials, including the highest-ranking PLA official, Gen Zhang Youxia, in January, regarded as a major purge of the PLA in recent history, sending shock waves among the rank and file.

Zhang Youxia was the Vice-Chairman of the all-powerful Central Military Commission (CMC), headed by Mr. Xi himself.

After his removal, the six-member CMC, which is the overall high command of the Chinese military, has been reduced to two: Mr. Xi and Gen Zhang Shengmin, secretary of the discipline inspection body.

Significantly, Zhang Shengmin, the last standing General of the six-member CMC, in his speech at the current parliament session, called on the military to resolutely obey the command of Xi.

We must deepen political rectification, improve Communist Party conduct, fight corruption, and strengthen loyalty to the party’s core and resolute obedience to the command of President Xi Jinping.

Mr. Zhang also called for more efforts to improve combat-orientated training and preparedness to safeguard national sovereignty, security and development interests.

It is also necessary to push for high-quality development, step up building integrated combat capabilities, strengthen the development and application of combat capabilities in new domains and of new qualities, and enhance military governance, Mr. Zhang was quoted as saying by the Hong Kong-based South China Morning Post on Saturday (March 7, 2026).

Significantly, no military officials from the Politburo of the ruling Communist Party of China (CPC) attended the current two sessions of the NPC and the Chinese People’s Political Consultative Conference (CPPCC), which began on March 4.

According to the official website of the NPC, the military delegation attending the two sessions has been condensed from 281 to 243 members, reflecting the series of expulsions of the PLA officials in the last few years for corruption and indiscipline.

Besides corruption, the main allegation against the sacked military officials was indiscipline and disobedience of the CPC leadership.

Since he came to power in 2012, Mr. Xi has been insisting that the military should function under the leadership of the CPC.

Critics say that through the anti-corruption movement, he consolidated his power, emerging as the core leader of the party, next only to the party founder, Mao Zedong.

Purges notwithstanding, China on Thursday (March 5, 2026) hiked its defence budget to about 1.91 trillion yuan ($277 billion), an increase of seven per cent from last year in yuan terms, as part of its efforts to ramp up rapid modernisation of armed forces to catch up with the U.S. military.

China, which in the past grew at double digits, has been setting a five per cent target for the GDP in the last three years amid growing domestic and external economic challenges.

This year, the target was lowered to 4.5 to 5% for the first time, which was seen as an acknowledgement that the world’s second-largest economy faced headwinds, relying more on external trade due to stagnating domestic consumption.

Published – March 07, 2026 10:21 pm IST

Chinese Premier Li Qiang gestures as he speaks during the opening session of the National People’s Congress (NPC) in Beijing
| Photo Credit: AP

Beijing:

China is expanding its consumer trade-in scheme to revive demand in the sluggish household sector. The move includes adding more home appliances to the list of products eligible for trade-in and offering subsidies for digital goods. Microwave ovens, water purifiers, dish-washing machines, and rice cookers are among the new additions to the scheme.

Consumers who trade in old goods will receive subsidies of 15-20%. Cellphones, tablet computers, smart watches, and bracelets under 6,000 yuan will also be eligible for a 15% subsidy. The government has allocated 81 billion yuan ($11 billion) for the program in 2025.

The trade-in scheme was initially launched last March, with a budget of 150 billion yuan funded through special government bonds. The program was used by 36 million consumers to buy 240 billion yuan worth of home appliances, driving 920 billion yuan of car sales.

China’s top economic planning body has said the schemes have already produced “visible effects” in boosting consumer spending. However, some economists have questioned whether the schemes will be enough to significantly increase consumer demand.

“The downside of such a policy is you are just pulling forward future demand,” Hui Shan, chief China economist at Goldman Sachs said. “If I’m going to replace my air conditioner once every 10 years, [you’re] pulling the next few years of demand into now.”

This trade-in scheme is also reminiscent of former US president Barack Obama’s “cash for clunkers” initiative, through which consumers could trade in old cars for new ones, post the 2008 global financial crisis.

However, Frederic Neumann, chief Asia economist at HSBC, said that such trade-in programmes are helpful only for a short-term goal and said that China would need more policies that would aid consumption for a sustainable change.

The expansion of the trade-in scheme comes as China faces challenges such as weak consumer demand and a deepening property crisis. In December, a key meeting of China’s leaders stressed the need for “vigorous” efforts to boost consumer spending. China is due to announce its 2024 economic growth figures next week, which Beijing expects to be around 5%.
 

China, the world’s second biggest economy, has been struggling to emerge from three years of pandemic isolation. On Tuesday it announced an expansion of its visa-free transit policy, allowing eligible foreign travelers, including Americans, to stay in parts of the country for up to 10 days.

This move aims to attract more overseas visitors and boost China’s economy.

Earlier, travellers could stay for only 72 to 144 hours depending on where they visited in the country.

However, the new policy, effective immediately, applies to passport holders from 54 countries, including the US, Canada, and several European and Asian nations. To be eligible, travellers must have confirmed tickets to exit China within 10 days. Travellers can enter the country in 60 places across 24 provinces, including the capital, Beijing, and China’s largest city, Shanghai

The expanded scheme also allows transit visitors to travel across regions during their stay, with some restrictions.

China has been easing its visa policies in recent months to bring back international visitors. The country has also waived visa requirements for passport holders from 38 countries, allowing them to stay in China for up to 30 days. This move is expected to promote tourism, business, and cultural exchanges between China and other countries.

The US State Department recently lowered its travel advisory for China from Level 3 to Level 2, citing improved conditions, putting it on par with France and Germany. This move follows the release of three Americans who had been detained in China for years.

According to the Dui Hua Foundation, an advocacy group, there are more Americans detained in China than any other country. The Level 3 advisory, the second highest, had warned of “the risk of wrongful detentions”. Now, after the release of the Kai Li, Mark Swidan and David Lin, the literature of the advisory has been changed to “arbitrary enforcement of local laws, including in relation to exit bans.”

However it is interesting to note that China is selective when it comes to visa exemptions for longer days. For a maximum of 30 days, citizens of 38 nations-including France, Malaysia, New Zealand, Japan, and Switzerland-can come without a visa, but the United States is not on this list.

Apart from the visa changes, China has also made an effort to streamline travel operations, improve infrastructure and address issues raised by international travellers.
 

With exports outpacing imports, China’s trade surplus rose to USD 97.4 billion. File (Representational image)
| Photo Credit: Reuters

China’s exports slowed in November and its imports declined, falling below forecasts and underscoring potential weakness in trade at a time when its leaders are striving to boost the economy after the shocks of the COVID-19 pandemic.

Customs data on Tuesday (December 10, 2024) showed exports grew 6.7% from a year earlier, down from a 12.7% increase in October(2024). Analysts had estimated that exports had risen more than 8%.

Imports fell 3.9% from a year earlier(2023), reflecting weak demand from industries and consumers. With exports outpacing imports, China’s trade surplus rose to $97.4 billion. The report came a day after Beijing pledged to loosen monetary policy and provide more support for the world’s no. 2 economy.

U.S. President-elect Donald Trump has threatened to slap tariffs of 60% or more on imports of Chinese goods, complicating Beijing’s efforts by threatening an area of the economy that has performed relatively well. At the same time, the property sector remains in the doldrums and consumer spending remains fragile.

China’s factory output growth slowed and missed expectations in July. File
| Photo Credit: Reuters

China’s factory output growth slowed and missed expectations in July, adding to a series of indicators that show the world’s second-largest economy is struggling to kick into a higher gear, even with recent government support.

Industrial output grew 5.1% from a year earlier, National Bureau of Statistics (NBS) data showed, slowing from the 5.3% pace in June and below expectations for a 5.2% increase in a Reuters poll of analysts.

Also Read:Explained | On China’s economic slowdown

In an upbeat contrast, the NBS’ monthly activity indicators showed retail sales, a gauge of consumption, rose 2.7% in July, quickening from a 2.0% increase in June and beating expectations for growth of 2.6%, a sign efforts to boost household spending were getting some traction.

However, analysts warn the broader outlook is still highly challenging for policymakers, suggesting more stimulus measures will be needed.

“The data shows that the economy has gotten off to a weak start in the second half of the year, and it is expected that the probability of replacing MLF with a RRR cut will increase, but key to maintaining 5% economic growth remains the arrival of fiscal spending,” said ANZ China market economist Xing Zhaopeng. He was referring to the People’s Bank of China’s medium-term lending facility and reserve requirement ratio.

On Thursday (August 15, 2024), the central bank injected cash through a short-term bond instrument and said it would conduct an MLF rollover later this month as it extends liquidity support to the financial system.

Chinese leaders last month signalled that they would give greater consideration to suggestions they turn to a new playbook and focus growth boosting efforts at consumers, rather than more funnelling more funds into infrastructure and manufacturing.

Calls for more growth boosting measures for the $19 trillion economy have dogged officials ever since a widely expected post-pandemic recovery failed to materialise in 2022.

While the government is still targetting growth of around 5% this year, analysts consider it increasingly likely that the world’s production powerhouse has entered a prolonged economic malaise similar to Japan in the 1990s.

Fixed asset investment expanded 3.6% in the first seven months of 2024 year-on-year, but also missed expectations for a 3.9% rise and also slowed from the 3.9% growth in the January to June period.

China’s central bank at a meeting earlier this month said it would step up financial support to the broader economy and efforts would be directed more at consumers to spur consumption.

But with domestic demand so weak and the outlook unclear, households and businesses are in no rush to borrow.

A statement issued after the meeting of Polit Bureau of China’s ruling Communist Party said coming months would be tough.
| Photo Credit: AP

China’s powerful Polit Bureau (PB) has endorsed the ruling Communist Party’s long-term strategy for growing the economy by encouraging more consumer spending and weeding out unproductive companies to promote “survival of the fittest.”

A statement issued on July 30 after the meeting of the 24 highest leaders of the party warned that coming months would be tough, perhaps alluding to mounting global uncertainties ahead of the U.S. Presidential election in November.

“There are still many risks and hidden dangers in key areas,” it said, adding that the tasks for reform and stability in the second half of the year were “very heavy.”

The PB promised unspecified measures to restore confidence in financial markets and boost government spending, echoing priorities laid out by a wider meeting of senior party members earlier in July. After that gathering, China’s central bank reduced several key interest rates and the government doubled subsidies for electric vehicles bought to replace older cars as part of the effort to spur growth.

The PB’s calls to look after low- and middle-income groups reflect pledges to build a stronger social safety net to enable families to spend more instead of socking money away to provide for health care, education and elder care. But it provided no specifics on how it will do that.

“This sounds promising on paper. But the lack of any specifics means it is unclear what it will entail in practice,” Julian Evans-Pritchard of Capital Economics said in a commentary. The party’s plans for how to improve China’s fiscal policies at a time of burgeoning local government debt were “short on new ideas,” he said.

Instead, the emphasis is on moving faster to implement policies such as the government’s campaign to convince families to trade in old cars and appliances and redecorate their homes that includes tax incentives and subsidies for purchases that align with improved efficiency and reducing use of polluting fossil fuels.

Under President Xi Jinping, China has prioritised developing industries using advanced technologies, a strategy that has made the country a leader in some areas but also led to oversupplies that are now squeezing some manufacturers, such as makers of solar panels.

‘Vicious competition’

The statement vowed support for “gazelle enterprises and unicorn enterprises,” referring to new, fast-growing companies and high-tech start-ups. It warned against “vicious competition” but also said China should improve mechanisms to ensure “survival of the fittest” and eliminate “backward and inefficient production capacity.”

The document also highlighted longstanding concerns. The countryside and farmers need more support to “ensure that the rural population does not return to poverty on a large scale,” it said. It also condemned what analysts have said is widespread resistance to fresh initiatives, saying that “formalism and bureaucracy are stubborn diseases and must be corrected” and warning that economic disputes should not be resolved by “administrative and criminal means.”

Headquarters of the People’s Bank of China in Beijing, China. File
| Photo Credit: Reuters

China surprised markets by lowering a key short-term policy rate and its benchmark lending rates on July 22, in an attempt to boost growth in the world’s second-largest economy.

The cuts come after China reported weaker-than-expected second-quarter economic data last week and its top leaders met for a plenum that occurs roughly every five years.

The country is verging on deflation and faces a prolonged property crisis, surging debt and weak consumer and business sentiment. Trade tensions are also flaring, as global leaders grow increasingly wary of China’s export dominance.

Also read: EU, China head towards a ‘trade war’ over import tariff on electric vehicles

The People’s Bank of China (PBOC) said on July 22 it would cut the seven-day reverse repo rate to 1.7% from 1.8%, and would also improve the mechanism of open market operations. Minutes later, China cut benchmark lending rates by the same margin at the monthly fixing. The one-year loan prime rate (LPR) was lowered to 3.35% from 3.45% previously, while the five-year LPR was reduced to 3.85% from 3.95%.

“PBOC starts to implement pro-growth policy, consistent with the message out of the plenum — authorities are committed to reach whole year GDP target, and policies will adjust after the disappointing Q2 GDP,” said Ju Wang, head of Greater China FX & rates strategy at BNP Paribas, adding that rising expectations for the Federal Reserve to start cutting interest rates also gave the PBOC room to manoeuvre its monetary easing.

China’s yuan eased after the rate cuts, and Chinese bond yields fell across the board after the rate cut announcement.

“The fact that PBOC didn’t wait for the Fed to cut first indicates that the government recognises the downward pressure on China’s economy,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management. He expects more rate reduction in China after the Fed enters its rate cut cycle.

China’s rate cut is aimed at “strengthening counter-cyclical adjustments to better support the real economy,” the PBOC said in a statement.

The announcement also comes after the PBOC said it would revamp its monetary policy transmission channel. PBOC Governor Pan Gongsheng said last month the seven-day reverse repo serves the function of the main policy rate.

In this photo released on July 18, 2024, by Xinhua News Agency Chinese President Xi Jinping speaks at the third plenary session of the 20th Communist Party of China (CPC) Central Committee held from July 15 to 18 in Beijing. China’s ruling Communist Party wrapped up a top-level meeting by endorsing policies aimed at advancing the country’s technological power and fortifying its national security.
| Photo Credit: AP

Beijing’s leaders vowed on July 18 to resolve “risks” plaguing China’s economy, but were yet to offer any concrete steps to pull the country out of its financial woes.

The world’s second-largest economy is grappling with a property debt crisis, weakening consumption, and an ageing population.

All eyes were on how this week’s Third Plenum meeting of the Communist Party in Beijing, attended by President Xi Jinping, might tackle that deepening economic malaise.

But few new policies were announced as the meeting wrapped up Thursday.

State news agency Xinhua said they had agreed to “prevent and resolve risks in key areas such as real estate, (and) local government debt”.

They also vowed to “actively expand domestic demand”, state media reported, after data this week showed retail sales — a key gauge of consumption — rose just 2% in June.

Gary Ng, a senior economist at Natixis, said the readout offered “nothing out of expectation as it just confirms existing policies.”

‘Market failures’

But Hoo Tiang Boon at Nanyang Technological University in Singapore told AFP the statement “acknowledges certain risks and obstacles to the Chinese economy”.

“It’s a sign that Beijing recognises the problems, but I’m not sure if they know what are the effective measures to address them,” he said.

The Third Plenum has for decades been an occasion for the party’s top leadership to unveil major economic policy shifts.

In 1978, then-leader Deng Xiaoping used the meeting to announce market reforms that would put China on the path to dazzling economic growth by opening it to the world.

And more recently following the closed-door meeting in 2013, the leadership pledged to give the free market a “decisive” role in resource allocation, as well as other sweeping changes to economic and social policy.

Echoing past plena, top officials promised Thursday to “give fuller play to the role of market mechanisms”.

But they also said they would “make up for market failures” and “smooth the circulation of the national economy”.

‘Positive signals’, but few specifics

Lynn Song, ING’s Chief Economist for Greater China, told AFP the readout offered some “positive signals”.

But, he said, the meeting was “not a platform for pushing specific new stimulus measures”.

“Those who were looking for new signals on the property market will likely be disappointed,” Song said.

“While real estate was mentioned as one of the three key risks China prioritises resolving, there was no further mention of expanding affordable housing nor further specifics on efforts to stabilise the property market,” he pointed out.

The meeting comes just days after China posted official statistics showing the economy grew by just 4.7% in the second quarter of the year.

It represented the slowest rate of expansion since early 2023, when China was emerging from a crippling zero-COVID policy that strangled growth.

Analysts polled by Bloomberg had expected 5.1%.

Beijing has said it is aiming for 5% growth this year — enviable for many Western countries but a far cry from the double-digit expansion that for years drove the Chinese economy.

The economic uncertainty is also fuelling a vicious cycle that has kept consumption stubbornly low.

Among the most urgent issues facing the economy is the beleaguered property sector, which long served as a key engine for growth but is now mired in debt, with several top firms facing liquidation.

With the country facing those headwinds, this week’s meeting resolved to “strengthen guidance of public opinion and effectively prevent and resolve ideological risks”, according to state media.

Officials also formally removed ex-foreign minister Qin Gang from the ruling Communist Party’s highest decision-making body, and “confirmed” the party’s move to expel former defence minister Li Shangfu.

Both officials disappeared from the public eye last year after just a few months on the job.