As China steers into 2026, it does so in a year of careful calibration that analysts describe as a critical passage towards 2027, when the Communist Party’s 21st Party Congress will unveil the next slate of top leaders and could see President Xi Jinping seek an unprecedented fourth term.
The pre-Congress year typically offers early signals of elite alignment and succession dynamics, making 2026 a key period for reading political cues in Beijing. Decisions taken — and signals sent — over the coming months will shape not only domestic politics but also China’s posture abroad, as it balances ambition with constraint in an increasingly contested global environment.
Against this backdrop, China is expected to project greater confidence internationally, from hosting the Asia-Pacific Economic Cooperation (APEC) Summit in Shenzhen to pressing its case as a shaper of global rules rather than a follower.
“China is moving from a cautious rise to a more confident projection of power,” said Jonathan Ping, an associate professor at Bond University in Queensland, Australia.
He added that 2026 will be a year in which Beijing seeks to position itself more assertively as a rule-shaper rather than a rule-taker.
A central variable in 2026 will be the trajectory of US-China relations. Analysts say there could be up to four face-to-face meetings between US President Donald Trump and Xi Jinping over the course of the year, potentially providing a stabilising anchor after a bruising 2025 marked by tit-for-tat trade actions.
A late-October meeting between the two leaders yielded commitments to resume more regular high-level dialogue, ease trade tensions and stabilise relations after months of escalation. Xi used a nautical metaphor to characterise the relationship, telling Trump that China-US ties were like “a giant ship” whose course needed to be properly set and carefully steered by both sides.
Trump later said he would make a state visit to China in April, adding that Xi would reciprocate with a visit to the United States later in the year. The two leaders could also meet at multilateral gatherings such as the APEC summit hosted by China in November and the Group of 20 (G20) summit hosted by the US in December.
“The overall trajectory of bilateral relations is expected to remain relatively stable over the coming year,” said Ren Xiao, a professor at Fudan University’s Institute of International Studies.
Beijing, he argued, now enters discussions with greater confidence after years of trade confrontation that have altered the balance of leverage.
The tariff war, Ren said, “has forged a more equal footing in bilateral relations than previously existed, with the US now fully recognising China’s formidable strength”. In recent rounds of friction, China has responded with counter-tariffs and targeted measures affecting US soybeans and rare earths, tools analysts say have strengthened Beijing’s bargaining position.
“China has seen it all before and is less worried now. Moreover, it holds trump cards that lend it further confidence,” Ren said.
Yet analysts caution that any easing in ties is likely to be tactical rather than transformative.
“There is a lot of talk about a reset in US-China relations,” said Chong Ja Ian, an associate political science professor at the National University of Singapore and a non-resident scholar at Carnegie China.
“But both Beijing and Washington see themselves locked in long-term competition — whether in technology, supply chains or relative global standing.”
Ideological divides, US alliance commitments in Asia and zero-sum competition over advanced chips and security remain immovable constraints, said Ping. Trust-building is further hampered by political behaviour on both sides, Chong added, noting that both the Xi leadership and the Trump administration have a record of walking away from agreements.
Global ambitions and the APEC spotlight
China is expected to use 2026 to further widen its global footprint, with November’s APEC summit in Shenzhen offering a prominent platform. Analysts say the gathering will allow Beijing to showcase its development narrative, technological strengths and diplomatic ambitions, particularly to emerging economies across the Indo-Pacific and the Global South.
That push builds on initiatives Beijing has rolled out in recent years. At the Shanghai Cooperation Organization summit in September, Xi unveiled China’s Global Governance Initiative (GGI), presenting it as a proposal to make global governance more fair, inclusive and responsive to developing countries.
The GGI builds on earlier proposals such as the Global Development Initiative and the Global Security Initiative, underscoring Beijing’s ambition to play a more proactive role in global agenda-setting.
China will seek to institutionalise its influence by presenting its governance and development model as pragmatic and equitable, said Ping, particularly in areas such as development finance, digital governance and climate cooperation tailored to Global South priorities.
Hosting APEC in Shenzhen will also allow Beijing to advance narratives of tech-driven connectivity and inclusive growth, while promoting ideas ranging from expanded BRICS+ engagement and yuan-based trade mechanisms to new Belt and Road Initiative sustainability standards and Chinese-led proposals on AI and data governance.
Still, China’s expanding outreach is not without friction. While Beijing increasingly casts itself as a champion of the Global South, its appeal remains uneven, said Chong. Concerns persist over labour standards, environmental protection and the crowding-out of local industries by Chinese exports. At the same time, China’s financial firepower is no longer what it was during the early years of the Belt and Road Initiative, with Beijing now favouring “small but beautiful” projects over massive lending.
Economic growth will remain a central pillar of China’s agenda in 2026. After setting its GDP growth target at around 5 per cent for 2025, analysts expect a similar benchmark to carry into the new year, reflecting Beijing’s preference for continuity and control.
Signals from December’s Central Economic Work Conference suggest fine-tuning rather than sweeping stimulus, with commitments to boost domestic demand, stabilise foreign investment and shore up key sectors.
“The moment probably marks a crossroads over whether the leadership truly wants to steer the economy towards domestic consumption, continue with an export-led model, or persist with a dual-circulation approach,” said Lim Tai Wei, a professor of East Asia at Soka University.
“Whether the GDP deflator turns positive again will be the most important signal in 2026,” said Gary Ng, senior economist at Natixis. He expects policymakers to rely on a calibrated mix of fiscal and monetary tools, but sees little appetite for a large-scale stimulus, with priorities focused on technology, security and the 15th Five-Year Plan beginning in 2026.
Rising trade barriers — not only from the US but also from the European Union and Mexico — are expected to complicate the outlook further.
Cross-strait tensions are expected to remain a central fault line in 2026, closely watched for signals ahead of 2027 — a benchmark often cited for the People’s Liberation Army’s modernisation goals. Analysts stress that 2027 is a planning parameter rather than a deadline.
“Having the capability does not equate to using it,” Chong said, noting the enormous risks and uncertain outcomes of any attack or blockade of Taiwan.
Still, pressure is likely to intensify. Beijing is expected to lean more heavily on coercive measures — including military drills, economic pressure and cyber operations — to signal resolve while stopping short of war, said Ping. Indicators to watch include sustained PLA joint exercises simulating blockade scenarios and expanded missile deployments along China’s coast.
Regional dynamics add complexity, with tensions between China and Japan flaring after comments by Japanese Prime Minister Sanae Takaichi on a potential Taiwan contingency drew sharp rebukes from Beijing.
Domestically, 2026 offers early clues about elite alignments ahead of the 21st Party Congress. Xi is already serving an unprecedented third term, and there is little public evidence of a successor being groomed, fuelling expectations that he could extend his rule.
“I would argue that the purges and lack of a successor indicate Xi’s confidence in his grip on power,” Chong said, noting recent high-level purges within the PLA ahead of its 100th anniversary in 2027.
Beyond elite politics, analysts warn of deeper risks from local government debt, property stress, weak consumer confidence and technological disruption, including job displacement from artificial intelligence.
Taken together, analysts say China enters 2026 with ambition and confidence, but also a keen awareness of the internal and external strains that make the year ahead both opportune and fraught with risk — a delicate balancing act on the eve of a pivotal political moment.
