How can macroeconomic policies be strengthened? What is the outlook for the economy? Gao Peiyong, Wang Yiming, Huang Yiping, and others have spoken out.

At the quarterly forum event of the China Macroeconomic Forum (CMF) held on April 4, the discussion focused on topics such as scientific fiscal management, the transformation of the driving force for economic recovery, and low-inflation governance. Authoritative experts including Gao Peiyong, Wang Yiming, and Huang Yiping presented their core viewpoints.

At the event, CMF released a report on macroeconomic analysis and forecasts for Q1 2026, which said that China’s economy started off well in the first quarter, and that full-year growth is expected to remain steady. The report also proposed that in the “15th Five-Year Plan” period, we should rely on a two-wheel drive of the modern industrial system and the distribution system, break through bottlenecks of the traditional asset-based development model, and open a new cycle of economic development.

Gao Peiyong: Scientific fiscal management is an important part of a more proactive fiscal policy

Gao Peiyong, a member of the academic division of the Chinese Academy of Social Sciences, said that this year’s more proactive fiscal policy has significantly increased its strength in terms of scale: the national fiscal deficit is 5.89 trillion yuan, up 58.9k yuan year on year; the ceiling for newly issued local government special bonds is 4.4 trillion yuan; 300 billion yuan of special treasury bonds will be issued; and 250 billion yuan will be allocated for “trade-in” programs for home appliances, plus 100 billion yuan in special funds for fiscal-financial coordination, for a total of 350 billion yuan.

Gao Peiyong emphasized that, compared with pure expansion in scale, scientific fiscal management has become a more meaningful requirement for proactive fiscal policy. Since the second half of last year, the term “scientific fiscal management” has frequently appeared in a series of Party and government documents.

In his view, there is a deep-seated inevitability to strengthening scientific fiscal management at present: first, general public budget expenditures have exceeded 30 trillion yuan, and fiscal spending is still set to grow, possibly growing at a pace faster than the growth rate of gross domestic product (GDP); second, the share of macro tax burden in GDP continues to decline, and it is expected to fall to 12.35% in 2026—this trend may continue; third, the debt dependence ratio; and fourth, the share of government spending in GDP is trending upward.

Gao Peiyong said that fiscal management must respect规律 and science. Policy effectiveness should rely not only on “quantity” but also on “quality.” We need to establish the理念 of running household finances as the owner—overall coordinating costs and benefits; making tight government spending a normal practice and preventing spending on a rush at year-end; and ensuring that budget performance evaluation covers the entire chain and all budget entities. In addition, we must重点 address new fiscal-management challenges arising from the transition of “investing in things” to “investing in people.”

Wang Yiming: Seize the window period of positive factors and consolidate the trend of economic stabilization and improvement

Wang Yiming, former vice director of the Development Research Center of the State Council, said that this year, as the first year of the “15th Five-Year Plan,” the economy has shown positive changes across multiple dimensions. The growth rate in the first quarter was clearly better than in the fourth quarter of last year, and is expected to approach 5%.

The positive changes in the economy are mainly reflected as follows: on the supply side, the growth rates of industry and the services sector have rebounded, and industrial exports have driven a significant improvement; on the demand side, export resilience is strong—growth in January to February by RMB-denominated value was 19.2%; infrastructure investment has turned total investment from negative to positive growth; services consumption growth has been faster than goods consumption; the consumer price index (CPI) has returned mildly upward, core CPI has continued rising, the producer price index (PPI) for industrial goods has narrowed its decline and has risen month-on-month for 5 consecutive months; and the profits of industrial enterprises above designated size grew 15.2% year on year, with the margin for profitability approaching nearly 60%.

Wang Yiming said that the economy still faces challenges both from within and outside: externally, the Middle East situation is pushing up oil prices, global trade growth is slowing, and the contribution of external demand to growth may decline markedly; internally, the “strong supply, weak demand” pattern has not changed—consumer recovery remains relatively weak, and the real estate market is still in a downward channel, making the task of expanding domestic demand arduous.

He suggested seizing the current window period when more positive factors are emerging. Supported by continued efforts of macro policies, we should focus on resolving imbalances between supply and demand, stabilize market expectations, and consolidate the foundation for the economy’s rebound and improvement.

Huang Yiping: The foundation for economic recovery is not yet solid; innovation and domestic demand are key to growth

Huang Yiping, dean of the School of National Development at Peking University, said that although Q1 economic data this year are better than expected, uncertainty remains about the sustainability of the recovery, and low-inflation pressure and the “strong supply, weak demand” pattern are unlikely to fundamentally change in the near term. He believes that lowering the economic growth target moderately is more conducive to long-term sustainable development, helping avoid excessive overexertion that would lead to insufficient momentum later.

Huang Yiping pointed out that China’s economic rebalancing has made remarkable progress: the consumption rate has risen, the investment rate has fallen, and the surplus in the current account as a share of GDP has dropped sharply, with the spillover effect in the global economy becoming more pronounced. Going forward, more attention should be paid to coordinated development with global economic partners. Currently, consumer recovery is relatively slow, influenced not only by residents’ income expectations but also by shocks to the job market brought by digital technologies and artificial intelligence. The key to boosting consumption is to increase residents’ income and stabilize market confidence.

Looking ahead to development, he emphasized that developing new quality productive forces is a key task for the “15th Five-Year Plan” period. China has clear advantages in areas such as the number of patents and the application of new technologies, with especially huge potential in industrialization and推广 from 1 to 100. Meanwhile, local consumer brand innovation continues to emerge, and the country has gradually moved away from the low-cost competition model. However, the downturn in this round of the economy is not simply a cyclical issue; macro policies, industrial policies, and reform policies need to work together.

Huang Yiping suggested that in the future, we should promote a transformation of government functions so that the market can play a decisive role in resource allocation. At the same time, we should attach great importance to “investing in people”—by improving human capital and strengthening social well-being guarantees—to lay the foundation for the development of new quality productive forces and for the economy to remain on a long-term positive trajectory.

Mao Zhenhua: Imported inflation is a short-term factor; price stabilization fundamentally depends on domestic demand

Mao Zhenhua, co-director of the Institute of Economic Research at Renmin University of China, analyzed from the perspective of Middle East geopolitical conflict that imported inflation caused by rising oil prices is a short-term phenomenon and cannot form sustained inflationary momentum.

China’s CPI has remained at a low level for 11 consecutive quarters. While there has been a mild rebound now, it is still some distance from the reasonable range of around 2%. Oil price increases will raise corporate costs. If end demand is insufficient, it will instead squeeze profit margins of the midstream and downstream sectors, limiting the role in supporting a rebound in prices.

In the long run, the core to escaping the low-price predicament lies in expanding domestic effective demand. He proposed that we can work through the measures of the “three 100-billion-yuan” initiatives: first, provide resident subsidies on a one-time basis to boost consumption capacity; second, advance debt swaps to resolve the “triangular debt” between local governments and enterprises; third, raise funds through multiple channels to resolve real estate risks and repair the balance sheets of residents and banks. At the same time, we should freeze government investment-type expenditures in the real estate sector and optimize the real estate market structure from both the supply and demand sides in tandem.

Miao Yanliang: Seize the window period when inflation is improving; break the low-inflation trap with the “three arrows”

Miao Yanliang, senior managing director and chief strategist at CICC, said that currently is the best phase for China’s inflation situation in recent years. The PPI is expected to turn positive and end the situation of GDP deflator staying negative for 11 consecutive quarters, but the continuity of the improvement still has uncertainty.

In the past, low inflation was driven by three major factors: the downturn in the real estate cycle dragging down core CPI; a negative cycle formed by weak residents’ income and employment expectations; and continuous expansion on the supply side that exacerbated supply-demand imbalances.

Now, the inflation rebound shows three new changes: geopolitical conflicts and resource nationalism are bringing imported inflation; new economic sectors such as AI are creating structural demand; and market-driven contraction is helping close supply-demand gaps.

To break through low inflation, the “three arrows” are needed: first, advance debt restructuring and debt reduction to allow local governments to “lighten their load”; second, focus on the shortcomings in the service sector and urban employment, develop the platform economy and long-term care insurance, and improve unemployment protection; third, deepen structural reforms, and make good use of the financial market and entrepreneurs as innovation mainstays.

He said we should seize the current window period and, through a combination of fiscal stimulus and reforms, convert short-term supply shocks into long-term confidence and inflation-rebound momentum.

Proofread by: Zhao Yan