Event: China

China’s leadership has stressed the need for a more proactive macroeconomic stance to support the country’s new five-year plan, ahead of next week’s annual “two sessions” – one of the country’s most important political events.Chaired by President Xi Jinping, the Politburo – a major decision-making body of the ruling Communist Party – met on Friday and set a decisive tone for policy direction, highlighting the need to expand domestic demand and strengthen new growth drivers.In an official readout released by state-run news agency Xinhua, the Politburo said it would “further advance the development of a unified national market, continue to prevent and resolve risks in key sectors, and exert every effort to stabilise employment, enterprises, markets and expectations”.It also pledged to “promote an effective improvement in the quality of the economy and a reasonable growth in its quantity, [and] maintain social harmony and stability to ensure a strong start for the 15th five-year plan”.Beijing continues to grapple with domestic deflationary pressures, a years-long slump in the property sector, weak consumption and escalating trade tensions. It is expected to set a lower growth target in a range between 4.5 and 5 per cent for 2026, compared with about 5 per cent last year.Against this backdrop, the leadership called for greater synergy between reforms and macroeconomic policies to support a coordinated recovery, according to Xinhua.

When China launched a sudden investigation into Ant Group, the financial subsidiary of the tech giant Alibaba, in 2020, it sent a shiver through China’s business community. Regulators halted Ant Group’s IPO, which was expected to be the world’s largest at the time, and later fined Ant and other tech platforms billions of dollars. Alibaba’s founder, Jack Ma, who had earned the ire of Chinese leaders after criticizing Beijing’s cautious approach to financial regulation, retreated from the public spotlight. For the next few years, most private firms operated in a fog of regulatory uncertainty: permissible boundaries for business activity were shifting, penalties arrived faster than rules could be interpreted, and enforcement agencies did not coordinate. Many entrepreneurs concluded that the business environment had turned against them, and they scaled back investment or relocated their operations abroad.But one year ago, in February 2025, Chinese leader Xi Jinping signaled that he might be changing course. He invited Ma to a symposium for entrepreneurs, which was the businessman’s first public appearance with top leaders since Ant Group came under regulatory fire. The photo op of Xi and Ma together dominated headlines, but it was only the most visible sign of a larger shift: China’s political leaders were again acknowledging that they need the private sector. Many of the breakthroughs that have powered China’s global dominance in batteries, e-commerce, electric vehicles, and solar panels have come not from state-owned enterprises but from private firms capable of rapid iteration, disciplined commercialization, and global competitiveness. Now, as China attempts to overcome the most critical chokepoints in science and technology—semiconductors, advanced materials, artificial intelligence, and biotechnology—its leaders are increasingly aware that progress depends on entrepreneurial initiative.Beijing has been laying the groundwork for a new way of managing the private sector. It is not completely loosening political control,…