China bets on 'strategic patience'
China kicked off 2026 with stronger-than-expected factory output and exports but is avoiding big QE-style stimulus, instead using targeted tools like 250bn yuan in special bonds and a 100bn yuan fiscal-financial fund to boost domestic demand. — The government is also aggressively stockpiling crude (reported additions of 1.24m barrels a day early in 2026) while keeping reserves in storage even as the World Bank warns commodity prices could slide to six‑year lows. ( )
Customs data show exports surged 21.8% year‑on‑year to about US$656.6 billion in January–February 2026, leaving a US$213.62 billion trade surplus for the period (tradingeconomics.com; scmp.com). (tradingeconomics.com) Official industrial output rose roughly 6.3% year‑on‑year in February 2026, according to national production series compiled by Trading Economics. (tradingeconomics.com). (tradingeconomics.com) The People’s Bank of China has held the 1‑year and 5‑year Loan Prime Rates steady at 3.0% and 3.5% through early 2026 while describing its stance as “moderately loose” and keeping reserve‑requirement cuts and rate moves on the table. (tradingeconomics.com; gov.cn). (tradingeconomics.com) Beijing’s 2026 fiscal plan extends beyond headline packages: authorities plan a large programme of ultra‑long special treasury bond issuance and local governments are slated to issue about CNY4.4 trillion in special‑purpose bonds this year, with Shandong selling CNY72.3 billion to kick off issuance. (gov.cn; yicaiglobal.com). (english.www.gov.cn) The government also moved to shore up banks, pledging CNY300 billion in capital injections to state‑owned lenders via special treasury bonds to replenish core capital and support tech financing, as set out in the government work report. (reuters.com; bloomberg.com). (money.usnews.com) Official calculations show China’s crude inflow surplus eased from a December 2025 peak of about 2.67 million barrels per day but remained above 2025’s average of roughly 1.13 million bpd in early 2026, reflecting strong imports that outpaced refinery runs. (reuters.com). (boereport.com) The World Bank’s Commodity Markets Outlook (Oct. 29, 2025) projects an aggregate commodity‑price decline of roughly 7% in 2026, a drop the bank says would bring the index to its lowest point in six years. (worldbank.org; financialcontent.com). (worldbank.org)
