China’s Xi prioritises ‘AI-plus’ and consumer spending to counter economic headwinds

President Xi Jinping has deemed the acceleration of consumption and innovation, particularly in artificial intelligence, an essential task as the world’s second-largest economy seeks to overcome challenges in 2026.

The president’s priorities, officially laid out before the year began, were revealed to the public in a speech excerpt published on Monday by the ruling Communist Party’s leading theoretical journal.

Xi emphasised the need to boost domestic demand, giving it the lion’s share of attention as an economic anchor that is central to stability, in line with Beijing’s pivot to unleash domestic dynamism in its economic policymaking.

The leader’s remarks were part of his speech to ministers and provincial cadres attending the annual course-setting central economic work conference in December, and their revelation may herald fresh measures to come ahead of China’s annual parliamentary meetings next month.

“We shall grow incomes for urban and rural residents, expand the supply of quality goods and services, eliminate unreasonable restrictions on consumption and tap potential in culture and tourism,” the Qiushi Journal quoted Xi as saying.

He also called for optimising schemes for consumer goods trade-in and equipment upgrades, and he emphasised the immense potential and key advantage of China’s “ultra-large market”.

But encouraging timid consumers to spend more remains a tall order for Beijing, given last year’s mixed performance. Retail sales grew 3.7 per cent, year on year, trailing the country’s 5 per cent overall economic growth and underscoring the urgent need for greater consumption support to help shake off the malaise.

South China Morning Post