Insights into New Development Momentum: Nine Guanghua Scholars from Peking University Analyze China's Economic Trends for 2026

The 2026 National People’s Congress and the Chinese People’s Political Consultative Conference concluded smoothly, drawing much attention to China’s economic trajectory in the first year of the “14th Five-Year Plan.” On March 17, the 2026 Peking University Guanghua School of Management and Peking University Institute of Economic Policy jointly hosted the Post-Conference Economic Situation and Policy Analysis Meeting at Peking University Science Park in Beijing. Focusing on macroeconomic conditions, foreign trade, capital market reforms, technological innovation, real estate development, personal bankruptcy systems, labor productivity, AI impacts, and other topics, nine scholars from Guanghua School of Management provided in-depth analysis.

Rebuilding Growth Logic and Seizing Cycle Opportunities

China’s economy is currently at a critical stage of structural transformation and cycle transition. Clarifying the underlying logic of growth is essential for achieving high-quality development.

Professor and Dean Liu Qiao of Guanghua School of Management pointed out that the core issue China faces is breaking the cyclical pattern of “low prices, low profits, and low incomes.” The key to solving this is “investing in people” and boosting household consumption.

Liu Qiao analyzed the “mystery of China’s household consumption rate,” noting that although physical consumption by Chinese residents has far exceeded the global average, the proportion of consumption measured by value in GDP is significantly low. This is mainly due to low domestic prices for goods and services, and a relatively small share of service consumption. Behind this are overcapacity and excessive competition in manufacturing, leading to persistent profit compression, which in turn limits income growth and consumption capacity of workers.

Faced with this structural contradiction, Liu Qiao emphasized that the key to high-quality development is to focus on modernization, especially in key industries and areas of investment and financing. Simultaneously, it is crucial to closely integrate “investment in physical assets” and “investment in people” by optimizing GDP accounting methods, increasing per capita disposable income, expanding property income, promoting urbanization of rural migrant workers, improving social security and fertility support, accelerating the construction of a unified national market, strongly supporting enterprises going global, and shifting from scale expansion to innovation-driven growth. These measures aim to genuinely enhance residents’ consumption capacity and willingness, promote total factor productivity, and develop new productive forces, ultimately breaking the cycle of inefficiency and achieving balanced, sustainable economic growth.

Associate Professor and Deputy Director of the Institute of Economic Policy at Peking University, Yanse Cai, suggested that China’s economy is entering a new cycle driven by long-term factors.

He believes that the past few years’ issues of overcapacity and downward price pressure have been affected by international geopolitical tensions and technological changes, bringing new developments. Geopolitical conflicts have intensified global uncertainty, triggering a rush for resource and industrial commodities, while the deployment of AI technology has created enormous energy demands. These two forces have jointly driven global demand for manufacturing products higher, with China leveraging its complete industrial chain and diversified energy strategy to secure a favorable position. The first two months of this year saw China’s exports exceeding expectations, reflecting this logic.

Based on this, Cai predicts that with external demand pulling and cost factors pushing, China’s prolonged three-year downward price cycle may be nearing an inflection point. He forecasts PPI could turn positive by late June, and CPI might rise to around 1.5% by year-end, leading to profit recovery for enterprises and improved consumption. GDP growth in the first quarter could reach 4.6%–4.7%. He emphasized that breaking out of the old cycle depends not on traditional policies but on China’s deep industrial and technological strengths.

Professor Tang Yao of Guanghua School of Management focused on geoeconomics, stating that the current rules-based international economic and trade order has been severely impacted. Trade in intermediate goods, final goods, production technologies, international finance, and logistics channels has become a key arena of international competition and strategic game. The world economy has entered an era of geoeconomics.

Tang Yao believes that China has made a significant judgment that the profound and complex changes in the global landscape pose serious challenges to the themes of peace and development. However, economic globalization remains an unstoppable historical trend, and international trade and economic cooperation continue to be vital drivers of global progress.

Activating Innovation Engines and Tackling Stock Transformation

Focusing on the three key areas of capital markets, technological innovation, and real estate, scholars concentrated on reform challenges and the transformation of driving forces, clarifying pathways for industrial upgrading.

Liu Xiaolei, Deputy Director of the Department of Economics and Management at Peking University and professor at Guanghua School of Management, stated that the policy signals from this year’s two sessions are clear and explicit: continue deepening comprehensive reform of capital market financing, strengthen patient capital, improve policies supporting long-term funds entering the market, and build a science and technology finance system compatible with innovation.

She explained that the goal of comprehensive reform of capital market financing is to optimize its role in supporting corporate financing while enhancing services for investors and asset appreciation. Comparing this year’s and last year’s government work reports, she noted a shift from “promoting market entry” last year to “improving mechanisms” this year, outlining a roadmap for attracting medium- and long-term funds into the market. The core is to break institutional barriers hindering long-term capital inflows through systemic reforms.

Regarding supporting technological innovation through financial services, Liu Xiaolei emphasized that fostering technological development is a key future goal for finance. Policy suggestions include supporting tech companies’ financing via bonds, leveraging patient capital in equity investments—especially through national guidance funds—and attracting more foreign equity investment.

Associate Professor Han Pengfei of Guanghua School of Management analyzed the global innovation landscape, stating that the current US-China technological competition revolves around four dimensions: original innovation (“0–1” breakthroughs), applied innovation (“1–N” iterations), technological autonomy and security, and building global influence.

Han Pengfei further explained that US-China tech rivalry is showing a complex pattern of “field differentiation and regional stratification”: the US maintains leadership in information technology and biomedicine as “science-driven” fields, while China is building global competitiveness in green low-carbon tech and high-end equipment manufacturing as “engineering integration” fields.

He noted that in critical mineral resources, China’s strategic stronghold is evolving from “resource control” to a combination of “standard-setting” and “high-end material supply.” In light rare earths, the US is catching up, but in heavy rare earths, China maintains dominance through its complete industrial chain and technological barriers. With “new quality productivity” as a pivot, China’s innovation paradigm aims to elevate from consolidating “engineering integration” innovation to a leap toward “science-driven” innovation.

Regarding the hot topic of new real estate models, Guanghua School of Management Professor and Vice Dean Zhang Zheng stated that stabilizing the real estate market after the two sessions depends on revitalizing stock assets to promote structural adjustment.

He emphasized that effective inventory reduction should not be simply about acquiring existing properties but transforming inefficient existing real estate into sustainable operational assets through a “buy—operate—exit—reinvest” cycle, aligning with the development of high-quality service industries.

Based on this, he proposed two mechanisms: first, establishing local inventory reduction investment funds with a “parent fund + sub-fund” structure, involving professional operators and supporting ultra-long-term financing and policies to match operational cycles; second, improving multi-tiered REITs to create exit pathways from real estate funds, inter-REITs, to public REITs, attracting long-term capital. Attention should also be paid to the comparability of accounting standards such as virtual rent to avoid policy misguidance and evaluation issues.

Focusing on People and Strengthening Legal Protections

Centered on livelihood, scholars offered new insights on institutional supply, labor productivity, and AI ethics. Zhou Li’an, member of the National Committee of the Chinese People’s Political Consultative Conference, Director of the Department of Economics and Management at Peking University, and professor at Guanghua School of Management, highlighted that the personal bankruptcy system is a key piece of the “half-bankruptcy law” in market economy.

His empirical research from 2015 to 2023 on nationwide pilot reforms found that these reforms significantly increased the number of new market entities by 8.33%, providing a fresh start for honest but unfortunate entrepreneurs and improving startup quality through debt clearance mechanisms.

He recommended accelerating the nationwide legislation of personal bankruptcy laws, improving bankruptcy review and disciplinary mechanisms, and balancing relief for honest debtors with strict penalties for debt evaders. Strengthening legal publicity and promoting coordination among courts, government, and other public sectors are essential for optimizing the business environment and stimulating economic vitality.

Professor Chen Yuyu of Guanghua School of Management and Director of the Institute of Economic Policy pointed out that with the continuous decline in the labor force, achieving this year’s GDP growth target of 4.5%–5% depends not on increasing investment or extending working hours but on improving labor productivity. Since the labor force is already shrinking, reaching the growth target requires about 6%–6.5% annual growth in productivity, a significant challenge.

He also noted that China’s growth engine is shifting. Consumption is not only a demand source but also a form of “consumption exploration”: consumers experiment with new possibilities in choosing, combining, and using products, which releases new demand signals. This exploratory behavior provides innovation directions for enterprises, driving product upgrades and industrial evolution.

He believes that future growth depends on a cycle where productivity improvements and consumption exploration mutually reinforce each other: technological progress enhances efficiency, while new consumption explorations open space for innovation, supporting higher-quality, sustainable growth.

Assistant Professor Qu Xincheng of Guanghua School of Management and Deputy Director of the Institute of Economic Policy analyzed that past technological revolutions replaced physical labor, making human intelligence more valuable; now, AI replaces intelligence itself. If hundreds of millions of AI agents with top-tier cognitive abilities operate around the clock, the impact will be enormous.

However, the “weak link effect” in the economy means overall growth remains constrained by bottlenecks that have yet to be automated. He emphasized that AI’s contribution to growth lies not in speeding up existing tasks but in enabling more tasks to be automated.

Looking ahead, Qu Xincheng identified three key issues: first, employment—after AI replaces some tasks, the remaining “weak links” become more valuable, as they are where human value resides. Second, distribution—how to share prosperity with groups that do not own AI capital when labor is widely replaced. Third, risks—misuse of AI tools and the potential for superintelligent AI to go out of control, requiring proactive measures now.