China picks up steam
China started 2026 with firmer industrial output—factory production rose 6.3% YoY in Jan–Feb, up from 5.2% in December—and foreign capital is pivoting to high‑tech sectors as Beijing unveils a new five‑year innovation roadmap ( ). Policymakers are favouring structural reforms over aggressive stimulus, so the rebound looks more policy‑led than demand‑driven for now (english.news.cn).
Electronics manufacturing jumped about 14.2% year‑on‑year in Jan–Feb and transport‑equipment output rose roughly 13.7%, with high‑tech manufacturing expanding about 13.1%—sectors that outperformed the broader industrial mix. (163.com)) Urban fixed‑asset investment turned positive, rising 1.8% in the first two months of 2026 after a 3.8% drop in 2025, while infrastructure investment surged about 11.4% and property investment slumped around 11.1%—signalling a public‑spending tilt. (tradingeconomics.com)) Beijing’s new 15th Five‑Year outline explicitly elevates “sci‑tech self‑reliance” and positions advanced manufacturing as the backbone of the 2026–30 plan, with a target to deepen innovation capacity by 2030. (en.qstheory.cn)) A revised Catalogue for Encouraged Foreign Investment, effective February 2026, channels incentives toward high‑tech, digital and green sectors to steer overseas capital into innovation‑led industries. (roedl.com)) Foreign direct investment has already been shifting: the share of utilized FDI in China’s high‑tech industries rose from about 28.3% in 2019 to roughly 37.4% in 2023, underscoring why overseas investors are repositioning into advanced manufacturing and services. (global.chinadaily.com.cn)) The government set a deliberately modest GDP target of 4.5–5% for 2026 and framed policy around structural reform rather than broad stimulus, while allocating 200 billion yuan from ultra‑long special treasury bonds to finance large‑scale equipment upgrades. (en.people.cn))
