Morgan Stanley's Xing Ziqiang: Next year's economic growth anchors may focus on areas such as artificial intelligence and green transformation

Morgan Stanley's Chief Economist for China, Xing Ziqiang, stated that the Central Economic Work Conference continues the tone of prudent policies and clarifies the support strategy. In terms of fiscal policy, Xing Ziqiang believes that the initial budget scale for 2026 will be roughly the same as that of 2025, but the expenditure pace will be more front-loaded, with an additional space of about 0.5 percentage points of GDP still available by mid-year. Regarding monetary policy, the tone will remain relatively loose, but the space for interest rate cuts is limited, expected to be between 10 to 20 basis points. The policy mix will still focus on the supply side, with a marginal tilt towards the demand side, reflecting the idea of "expanding domestic demand + optimizing supply."