Fiscal Policy & Stimulus

China's fiscal stance is still holding, not expanding, and this batch does not move it. The only new fiscal-relevant document is a multilateral-governance statement rather than a spending decision: Finance Minister Lan Fo'an's video address to the Asian Infrastructure Investment Bank's 11th Board of Governors meeting in Doha on 28–29 September, themed "Future Infrastructure: Impact and Innovation" ¹. It touts China as the AIIB's largest shareholder and host, calls 2026 the opening year of the 15th Five-Year Plan, and describes the economy as "generally stable, trending new and better" — but carries no disbursement, no project catalogue and no domestic number. Assistant Minister Chang Junhong attended in person and held bilateral meetings, but nothing here is a stimulus instrument.

The pattern that defines the stance is architecture over appropriation. The eight-department smart-home action plan (商消费发〔2026〕148号) rides the existing 2026 consumer-goods trade-in (以旧换新) envelope, letting localities set their own smart-home subsidy categories and standards instead of opening a new central funding line ^2,3. Liaoning's Investment and Trade Fair Consumption Promotion Month (15 Sep–15 Oct) links 25,000 merchants across nine scenarios with "dual-voucher" (双凭证) coupon bundles and a "one ticket stub opens Liaoning" scheme — a demand channel with no money attached ⁴. The NDRC's 15 September symposium chaired by Zheng Shanjie promised to recommend quality investment projects by industry and orderly open key application scenarios, but committed no disbursement ⁵. Chongqing's newly issued package sets out "specific measures" to expand effective demand and reshape consumption, yet reports no funding figure ⁶.

The demand data keep arguing for stimulus the budget has not delivered. August retail sales rose just 0.4% y/y and January–August only 1.1%; January–August ex-autos was 2.7% and August ex-autos 2.5%. By format, convenience stores (+5.5%) and supermarkets (+3.8%) grew while specialty stores (-2.2%), department stores (-3.0%) and brand stores (-10.0%) fell, and online goods and services rose 4.6% ⁷. Chongqing's local lens reinforces the shift toward value and experience: January–July service retail grew faster than goods, and upgrading categories — sports and entertainment goods +14.9%, communication equipment +11.1% — outpaced the aggregate, the signature of value-seeking rather than volume ⁶. That is a trade-in programme losing pull-forward momentum without a top-up.

Supply still tells the opposite story. August industrial value-added rose 5.2%, equipment manufacturing 12.1% and high-tech manufacturing 16.7%, with January–July industrial profits up 17.6%; yet the August manufacturing PMI was 49.8% and CPI only 0.8% ^8,9. Strong production against weak prices and weak final demand is the textbook case for stimulus — and the answer remains architecture rather than appropriation, which is why "holding" reads as passive rather than prudent.

External pressure persists without a new offsetting outlay. The US preliminary affirmative countervailing-duty and critical-circumstances determination on tin mill products stands ¹⁰. The Taiwan Affairs Office touts the ten cross-strait exchange-and-cooperation measures issued in April and Taiwanese pomelo flowing into mainland supermarkets, wet markets and e-commerce as a demand channel for Taiwan's farmers ¹¹ — a political-trade play, not a fiscal instrument. The PBOC–Hong Kong meeting on connectivity and the offshore renminbi is a financial matter ¹², and the US carbon-standards repeal is a US regulatory item with no China fiscal content ¹³.

Implications and watch items. Unless the trade-in envelope is topped up or extended, the consumption drag keeps dragging, and the December planning cycle is the natural place for a decision. Watch four things: whether the 2026 trade-in programme runs into 2027 — settled by the Q4 MOF/NDRC funding notice or the December Central Economic Work Conference; whether the NDRC's project-recommendation promise converts into actual private-investment disbursement — settled by the next NBS fixed-asset-investment release and the NDRC project catalogue; whether continued retail weakness (autumn data, October Politburo readout) triggers a direct household transfer rather than another promotion month; and whether Chongqing's package, read in full, carries any appropriation at all.