If you’ve been waiting for Beijing to unveil a plan to fix China’s flagging consumption, we have an answer for you.
Two prominent essays published earlier this month – one in the Party’s flagship theoretical journal Qiushi and the other in state media Economic Daily – laid out with unusual clarity how Party leadership is thinking about the country’s economic malaise.
The core message: Getting China out of its economic funk requires broader adoption of advanced technologies across the economy.
The Qiushi article argued that China’s economy is “in a critical period of transition between old and new growth drivers,” adding that:
“A seamless transition…is impossible; there will inevitably be a gap”
Bridging the gap requires “maximizing the positive effects of new technologies,” and ensuring the benefits aren’t limited to a handful of advanced industries by:
“Vigorously promoting the penetration and diffusion of new technologies into traditional industries.”
The commentary in Economic Daily made a similar argument, saying China’s “uneven development reflects a profound structural transformation,” and that:
“There will inevitably be…discomfort along the way”
The way through is to pursue:
“The diffusion of new technologies across different industrial sectors”
It identified environmental, digital, and AI as the key technologies that should be adopted more broadly.
Read together, the two essays confirm what we have been arguing for months: Beijing is playing the long game.
That framing helps explain why policymakers haven’t responded to the country’s weak consumption, collapsing property market, and depressed household confidence with a proper demand-side stimulus.
Because from Beijing’s perspective, weak demand is a short-term price to pay for a much bigger prize – an economy in which advanced technology permeates every sector, from steelmaking to logistics to agriculture, lifting productivity and cementing China’s position at the technological frontier.
The consequences of this strategy are clear:
First, China’s K-shaped economy – with AI and renewable-energy sectors surging while domestic-facing industries stall – is not going to correct itself any time soon.
Second, exports, which are the natural outlet for surplus industrial capacity that the domestic economy can’t absorb, will keep surging.
This has significant implications for anyone doing business in or with China.
Companies planning around a domestic consumption rebound need to reset their expectations. Exporters competing with Chinese firms in third markets should expect competition to sharpen. And investors betting on a stimulus-driven turn in Chinese equities should think again.
We help clients think through exactly these kinds of strategic implications.
Get in touch if you want to work through what Beijing’s long-game strategy means for your business.
Dinny McMahon, Head of Markets Research, Trivium China
What you missed
US-China
The first meaningful volumes of Nvidia H200 chips have entered China, with ByteDance and Tencent receiving about 10,000 in recent weeks.
This approval comes roughly five weeks out from Xi’s September 24 state visit to Washington, suggesting it’s a gesture to signal that China isn’t totally rejecting Trump’s offerings.
Chinese officials are reportedly frustrated with the Trump administration’s lack of planning for Xi Jinping’s pending visit to the US.
Per the SCMP’s sources: “No US official or agency had thus far assumed responsibility for organizing the visit.”
Foreign affairs
Swiss President Guy Parmelin and Commerce Minister Wang Wentao announced the two sides had concluded talks on upgrading their 2014 free trade agreement.
Under the upgraded deal, 99.8% of Swiss exports will enter China duty-free.
Xi Jinping met with Ecuadorian President Daniel Noboa during the latter’s eight-day state visit to China.
Beijing okayed resumed imports from eight Ecuadorian shrimp plants just ahead of Noboa’s visit.
Econ and finance
A Shenzhen court sentenced Evergrande founder Xu Jiayin to life imprisonment over eight financial-crime charges, including illegal fundraising, financial fraud, and corporate bribery, to which he pleaded guilty in April.
The court also handed prison terms to 56 other former Evergrande executives and employees involved in the offenses, including Xu’s two sons.
In an August 16 piece co-authored with the China Iron and Steel Association (CISA), top Party journal Qiushi argued that steel must not become a “sunset industry.”
The article argues steel is foundational for both emerging industries and strategic sectors like shipbuilding and defense, and explicitly warns against US rust belt-style hollowing out.
In July, retail sales of services grew just 3.3%, the slowest rate in two years and the most concerning signal in this month’s macro data.
Throughout 2026, we have pointed to resilient services spending as evidence that consumer spending still had pockets of strength.
That argument is becoming harder to sustain – and if services consumption continues to decelerate, the last remaining pillar of China’s consumption story will have crumbled.
Tech
Anhui issued a 2026-2028 action plan to promote AI-powered one-person companies (OPCs) – solo ventures built on large models and agents.
Net zero
The macro planner (NDRC) and energy administration (NEA) released the 15th Five-Year Plan (FYP) for oil and gas development, covering 2026 through 2030.
The plan signals no acceleration in China’s decarbonization drive, instead aiming to increase combined production of oil and gas to 440 million tonnes of oil equivalent, up from ~420 million in 2025.
Politics
The Party gathered in the Great Hall of the People to celebrate the 100th anniversary of the birth of former Party General Secretary Jiang Zemin.
In a speech, Xi explicitly praised Jiang for voluntarily proposing to give up his leadership positions within the Party.
But unlike in his eulogy for Jiang in 2022, Xi did not mention how in so doing Jiang cleared the way for a new generation of Party leaders.
As always, it was a busy week in China.
Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.