China vows to support economy after growth slows below target.

Bloomberg

Tuesday, July 21, 2026 7:13 | 2 minutes read

China's government vowed to ensure the country meets its full-year economic target and move forward with policy implementation, after growth fell below the official target range in the second quarter.

An executive meeting of the State Council said that 'the effective use of public funds should be maximized,' according to a statement from the Xinhua News Agency on Monday.

Markets generally expect the government to accelerate spending and increase investment in infrastructure projects to ensure growth stays on track.

Mon, 20 2026

Officials met days after it was revealed that China's economic growth unexpectedly slowed last quarter to 4.3%, below the target of 5%, and a slowdown in public spending was a key factor in the deceleration.

The directives in the statement pointed to the importance of the 7 trillion yuan ($1 trillion) 'Six Networks' program, a major infrastructure project that includes building data centers and underground pipelines.

The meeting heard a report on its progress and concluded that its planning and construction should be pushed forward systematically and implemented quickly according to local conditions and sector needs, and financial resources should be strengthened to ensure successful establishment of major infrastructure networks.

Approaching Easing of Fiscal Constraints

Adopting a less restrictive fiscal policy would mark a shift for China, after its cumulative budget deficit narrowed in May for the first time in more than two years.

This discipline reached the point of implementing an effective austerity policy that did little to ease the pressures on the economy from weak domestic demand.

Wed, 15 2026

A turning point may come soon, as provinces approach a key stage in the refinancing plan for heavy debts, which could allow officials to refocus their efforts on raising funds for infrastructure projects.

The cabinet meeting also discussed audit work to monitor the implementation of the central government budget and other public financial expenditures and revenues, and officials vowed to strengthen budget management and deepen fiscal reforms, saying they take seriously the problems identified by audits.

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