2026 China Forecast
By Maciej Gaca
(Expert, Centre For International Relations, Poland)
The year 2025 did not bring China the strategic shift or adjustment to its governance model that some external observers had anticipated. From a systemic perspective, it was rather a year of completion of the direction that had become clearly outlined after 2020 and was subsequently confirmed in Party documents and institutional practice. Instead of signals of liberalisation or a technocratic reset, a consistent consolidation of centralisation and control mechanisms was visible.
Accordingly, 2026 does not appear to be a turning point, but rather the first full year of operation of the mechanisms that were gradually implemented and tested between 2020-2025. The transition from the adjustment phase to routine is of crucial prognostic significance. It means that state actions will no longer be justified by the exceptional nature of the situation but presented as a standard way of governing.
China is not in a transitional state after 2025. Rather, it is entering a period of stabilisation in a model that combines high short-term resilience with decreasing adaptive flexibility. The state apparatus remains capable of absorbing shocks and imposing order, but it is increasingly difficult to generate development impulses independent of the decision-making center. This paradox of stability achieved at the expense of dynamism is a key starting point for 2026 forecast.
Power Architecture
Analysing China’s power architecture requires a shift away from the classic division between party and state as distinct spheres. In governance, this boundary has been systematically blurred in recent years, with the party remaining the key decision-making entity, simultaneously acting as the political center, cadre apparatus, and overarching institutional regulator. In this arrangement, the state functions as the executive, while law and technology serve as tools for regulating behavior.
In 2026, the state no longer functions as an autonomous political actor. Its role is to operationally implement decisions made within party structures and to manage its consequences. This is evident in both economic policy and internal security. Ministries, local authorities, and regulatory agencies operate within increasingly narrow discretionary limits, and the system of personnel accountability rewards procedural compliance over initiative.
Law plays a special role in the architecture of power. The concept of the rule of law has not been abandoned, but rather reinterpreted. Law ceases to function as a boundary of power and begins to operate as an instrument for managing behavior. Expanding the definitions of state security, public order, and national interest allows for the inclusion of increasingly broader areas of social and economic life in the sphere of security-related regulations.
This logic is evident in both central legislation, implementing regulations, and judicial practice. The authorities do not communicate the uniqueness of these solutions but present them as part of normalising the system in the face of new threats. As a result, the 2026 law stabilises the system, but at the expense of flexibility and trust. Stability relies increasingly on effective enforcement and less on social acceptance.
The fourth pillar of government architecture is technology. Data analysis systems, digital infrastructure, and monitoring tools are being integrated with the administrative and legal apparatus. Technology functions not as an autonomous sector of innovation, but as an infrastructure of governance. The power architecture in China is therefore characterised by a high degree of control and short-term stability, while limiting capacity for self-correction. The system remains functional, but increasingly expensive to maintain.
The Economy
China’s economic forecast requires adjustments to 2025 estimates, not because the system’s fundamental parameters have changed, but because the growth management mechanism, which was still considered a temporary solution in 2025, has become entrenched. It becomes part of permanent political and economic architecture.
In 2025, the authorities’ primary goal was to prevent a sharp slowdown and maintain growth at a politically acceptable level. Their instruments included selective credit support, local fiscal interventions, real estate market control, and stabilisation of the financial sector. These measures mitigated the risk of a systemic crisis but failed to unleash new sources of growth dynamics. Therefore, 2026 begins in conditions of relative stability, but without any indication of structural transformation.
Economic growth will increasingly be driven by administrative decisions rather than market processes. The projected growth rate, around 4–4.5%, reflects the state’s ability to allocate credit, steer investments, and mitigate financial risks. The real estate sector remains an area of managed stabilisation. The goal is not to return to the expansion model of a decade ago, but to limit balance sheet effects and prevent debt escalation.
One of the key elements of the 2025-2026 forecast revision is continuation of weak domestic consumption. The authorities have not opted for broad redistributive measures that could significantly boost demand. Controlling fiscal and financial risks remains a priority, even at the expense of slower domestic demand growth. This means that consumption will not become the main driver of growth in 2026.
From an international perspective, China will remain an active exporter, and its trade surplus will be a pillar of macroeconomic stability. At the same time, friction with trading partners will increase, stemming from the perception of the Chinese model as asymmetric and subsidised. For the EU, this means further pressure on protective and regulatory instruments.
Technology, Law & Security
In China law, technology, and security form a coherent governance system, with each element mutually reinforcing. Law does not function as a neutral framework, but rather as an instrument for regulating behavior. Technology enhances the effectiveness of enforcement, and security serves as the overarching interpretative category for political and regulatory decisions.
The phenomenon of lawfare—understood as the strategic use of law to achieve state goals—is structural in nature in China. Regulations regarding data, cybersecurity, the activities of foreign entities, and academic cooperation are not responses to individual threats, but rather elements of a lasting institutional order. Law acts preventively here, limiting actors’ room for maneuver even before open conflict erupts.
Technology serves as the infrastructure for this model. Data analysis systems, digital platforms, and monitoring tools enable targeted enforcement and early identification of problematic behavior. In 2026, technology is not an area of deregulation, but one of the main channels for consolidating control.
China is promoting its own approach to the relationship between the state, technology, and the market through infrastructure projects, technical standards, and international forums. This process does not lead to an immediate change in global rules, but rather gradually increases the acceptability of solutions that strengthen the state’s role in information management.
Foreign Policy
Chinese foreign policy remains driven by the logic of mitigating systemic risks. Beijing avoids actions that would lead to irreversible confrontation, preferring to gradually push the boundaries of acceptable behavior. This strategy relies on actions below the threshold of open conflict.
Taiwan remains the most important area of this policy. The pressure is multidimensional: military, economic, informational, and legal. Its goal is not to achieve a quick resolution, but rather to gradually narrow Taipei’s decision-making space and normalise China’s presence in the island’s surroundings.
The war in Ukraine serves as a source of observation for Beijing, not a model to be replicated. The scale of sanctions, the economic costs, and the long-term mobilisation of the West all serve as arguments for caution. At the same time, the conflict is being used in relations with Europe as part of a narrative of responsibility and need for stabilisation. China’s actions do not take the form of an overt threat, but rather rely on the selective exploitation of economic, regulatory, and political dependencies. — INFA