Range of macro tools to keep economy on track in World Economy News 03/03/2026 China’s strategic priorities for the next five years will center on developing new quality productive forces and boosting domestic demand, according to the recently unveiled Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development. While it is undoubtedly crucial to concentrate efforts on breakthroughs in cultivating new quality productive forces, a persistent shortfall in domestic demand could further reinforce the current macroeconomic situation of strong supply and weak demand. The urgency of addressing this issue is emphasized because it has evolved beyond a mere medium — to long-term structural challenge and has arguably become a practical factor constraining current economic development. What is driving this concern? The dynamic of strong supply and weak demand has been in place for years and is hardly new. The reason this contradiction is being discussed so frequently today is largely because in the past, exports served as a critical outlet by absorbing potential domestic overcapacity. However, the landscape has undergone profound shifts recently. International market openness has significantly receded as trade barriers continue to mount. At the same time, China has evolved from a relatively small economy into one of global scale. As a result, its exports are now large enough to influence worldwide market balances, prompting concerns among trading partners that a prolonged surge could unsettle their industrial bases, threaten jobs, and strain income distribution. Given these shifts, the option of relying on rapid export expansion to absorb excess domestic capacity is no longer as available as it once was. Therefore, the imbalance between strong supply and weak demand is becoming more pronounced in the short run. Simply put, there is now less room to offset this pressure through external markets and global trade flows. To wrap up, the supply-demand mismatch has crossed over from being a chronic issue to an acute, immediate one. The recent Central Economic Work Conference, in my view, flashed some new signals. The policy stance on supporting growth is likely to be more forceful than anticipated, suggesting that the country will deploy a broader range of macro tools and measures to keep the economy on the track. As discussed earlier, the two core priorities are developing new quality productive forces and strengthening domestic demand. This emphasis was clearly reflected at the Central Economic Work Conference, which placed expanding domestic demand and building a strong domestic market at the top of its eight key tasks. Innovation-driven development ranked second, with a call to accelerate the cultivation of new growth drivers. Against this backdrop, boosting domestic demand has become far more urgent. It is no longer a long-term policy objective but a near-term imperative, making the shift in emphasis both timely and consequential. Over the longer term, China’s growth model is also evolving. Expansion is being driven less by factor-intensive inputs and more by innovation. At the same time, the economy is moving away from relying on external markets to absorb output and toward drawing more of its momentum from the domestic market. Therefore, the imbalance of strong supply and weak demand, especially subdued consumer demand, has been a persistent feature o