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China to bolster consumption, tech development as U.S. tensions simmer

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10 months ago

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Pictured here is the Great Hall of the People in Beijing, China, ahead of the 76th anniversary of the founding of the People’s Republic of China on September 30, 2025.

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BEIJING — China’s top leaders on Thursday stressed their resolve to boost domestic consumption over the next five years, on top of widely expected plans to bolster homegrown tech.

That’s according to a state media readout of the closely watched “Fourth Plenum” meeting for setting five-year development targets. China on Thursday also confirmed that Vice Premier He Lifeng, who participated in the plenary meeting, will visit Malaysia from Friday to Monday for U.S. trade talks — as anticipation grows over a possible meeting between the U.S. and Chinese presidents at the end of the month.

Despite broad calls to bolster China’s international influence and “safeguard the multilateral trading system,” the readout did not mention major countries by name as the meeting focuses largely on domestic development.

China must “vigorously boost consumption,” the meeting readout said, according to a CNBC translation of the Chinese. The leaders elaborated on the need for consumption with calls to balance it with “effective investment” and “adhere to the strategic point of expanding domestic demand.”

“New demand will lead to new supply, and new supply will create new demand,” the report said. The leaders also called for effective implementation of policies to support businesses and “special actions” to boost consumption.

The tone indicates that China’s policymakers are taking a closer look at the relationship between economic supply and demand than they have in past years, said Zong Liang, former chief researcher at the Bank of China.

That change — which doesn’t come lightly in China’s ideologically driven government — still isn’t a green light for cash handouts. Even with muted retail sales since the pandemic, Beijing has steered away from directly giving consumers money, in contrast with U.S. stimulus checks in the wake of Covid-19.

A reconstruction of the global monetary order is underway: CICC

The readout “signals a continued emphasis on investment — this time as a means to stimulate consumption — rather than a bold, direct push to expand consumption itself,” Yue Su, Beijing-based principal economist for China at the Economist Intelligence Unit, said in a note.

“We can therefore expect investment to focus more on consumption-related sectors and activities, such as improved urban planning, public services, and elderly care,” she said. Su pointed out that over the past decade China has heavily relied on investment for growth, leading to concerns about overinvestment.

In the last two years, China has sought to boost consumption with subsidies targeted at home appliances and certain other consumer goods. The country has also encouraged local governments to hold sporting events and other entertainment to boost spending.

Since the readout didn’t call for “vigorously boosting income,” Eurasia Group’s China Director Dan Wang is more cautious about Beijing’s consumption plans.

“It is just a wishful goal,” she said. “I can’t see fiscal commitment in this.”

The readout emphasized achieving the 2025 growth target of around 5% and other previously shared goals for 2027 and 2035.

That all implies annual growth of 4.6% through 2035, Wang said, noting it will be “very costly” to achieve. She expects that ultimately resources will be concentrated in high tech and emerging industries, with little improvement on the demand side while deflationary pressure remains entrenched.

China’s previous policy goals to become a global leader in electric cars, for example, have been criticized for encouraging companies to flock into subsidy-supported industries, resulting in a race to the bottom that’s then pressured industries in other countries.

A ‘significant leap forward’ in tech

Beijing this year has sought to address some of the excessive competition. But the country has meanwhile had to ramp up its technological development as the U.S. has increased restrictions on China’s ability to access advanced tech.

China’s top leaders on Thursday called for improving tech self-reliance. “We will strive for the next five years, to achieve a significant leap forward in [China’s] economic strength, scientific and technological strength, national defense strength, comprehensive national power and international influence by 2035,” the readout said.

It also called for developing a “strong agricultural nation” and “accelerating the establishment of a strong manufacturing nation,” while noting the need to maintain a “reasonable” proportion of manufacturing in the country.

The only mention of the ongoing property slump called for “high-quality development” of real estate. Beijing also noted it will work towards previously released plans to reduce carbon emissions.

Senior officials are set to share more details about the country’s upcoming five-year goals in a press briefing Friday morning, while a more comprehensive readout is expected in coming days. China typically doesn’t release detailed full five-year targets until its parliamentary meeting in March.

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Private Credit Expansion and Regulatory Oversight in 2026 Capital Markets

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5 days ago

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August 9, 2026

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The global private credit market has solidified its role as a fundamental pillar of enterprise finance, expanding rapidly across middle-market lending, asset-backed finance, and infrastructure financing. As non-bank financial institutions capture a larger share of corporate debt origination, global regulatory bodies are increasing oversight to evaluate market transparency and systemic risk interconnections.

Growth Drivers in Direct Lending
Direct lending platforms have continued to attract substantial institutional allocations from pension funds, sovereign wealth entities, and insurance companies seeking attractive risk-adjusted yields. Private debt funds offer corporate borrowers customized financing structures, faster execution timelines, and confidentiality compared to syndicated loan markets.

In 2026, private credit managers are increasingly financing larger corporate transactions, providing multi-billion-dollar credit facilities for buyout deals and corporate restructurings. The flexibility of private debt contracts—featuring unitranche pricing and tailored covenant packages—has made direct lending the preferred capital source for middle-market enterprise sponsors.

Regulatory Scrutiny and Systemic Risk Assessment
The rapid growth of non-bank intermediation has drawn heightened scrutiny from financial regulators in North America and Europe. Because private debt agreements are negotiated privately without public exchange disclosures, central banks are evaluating potential vulnerabilities related to asset valuation consistency and fund liquidity profiles.

Regulatory agencies are introducing guidelines aimed at improving reporting standards for private investment vehicles managing institutional assets. Key focus areas include monitoring leverage ratios within private credit funds and evaluating indirect credit exposures between commercial banking institutions and private debt funds.

Navigating Elevated Refinancing Costs
With benchmark interest rates remaining elevated, private debt borrowers face higher debt service obligations on floating-rate credit facilities. Financial advisory firms report an increase in proactive liability management strategies, including payment-in-kind (PIK) interest options, equity infusions from sponsors, and covenant modifications.

Private credit managers with deep operational capabilities are actively working alongside portfolio companies to optimize working capital and maintain cash flow coverage ratios during periods of higher borrowing costs.

Key Financial Takeaways
1. Mainstream Asset Class: Private credit has expanded beyond niche alternative asset status into a core corporate finance solution.
2. Enhanced Transparency Standards: Regulatory frameworks are evolving toward greater disclosure requirements for private debt managers.
3. Proactive Risk Management: Lenders and sponsors must prioritize debt sustainability and active portfolio monitoring amid high benchmark rates.

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Finance

Venture Capital and Startup Valuations in 2026: Focus on Unit Economics and Sustainable Growth

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1 week ago

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August 5, 2026

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The global venture capital (VC) ecosystem is operating under a disciplined investment framework in 2026. Following years of valuation adjustments and shifting liquidity environments, venture capital firms and private equity investors are prioritizing proven unit economics, positive cash flow pathways, and capital efficiency over rapid, unconstrained user acquisition.

The Shift Toward Disciplined Startup Valuations
Early-stage and growth-stage startup valuations have stabilized at sustainable historical averages. Venture capital partners are conducting rigorous due diligence processes before deploying capital, scrutinizing gross margins, customer acquisition costs (CAC), net revenue retention (NRR), and lifetime value (LTV) metrics.

While total capital deployed remains robust, seed and Series A funding rounds are taking longer to finalize. Founders are expected to demonstrate clear product-market fit and defensible intellectual property rather than relying on top-line revenue projections unsupported by strong underlying economics.

M&A Activity and Liquidity Solutions
The market for venture-backed exits is seeing renewed momentum through strategic mergers and acquisitions (M&A) and secondary market liquidity facilities. Established corporate enterprises are acquiring high-performing technology startups to integrate proprietary artificial intelligence models and specialized software solutions into their product ecosystems.

Simultaneously, secondary market transactions have become an essential liquidity mechanism for early employees and institutional investors. Specialized secondary funds are purchasing pre-IPO shares at discounted valuations, providing liquidity opportunities while companies remain private for longer durations.

Sector Allocation: Deep Tech, Clean Energy, and Enterprise Automation
Venture capital investment is heavily concentrated in deep technology and capital-intensive engineering sectors. High-growth investment themes include:
– Next-Generation Semiconductors: Hardware startups designing specialized AI processors and energy-efficient microchip architectures.
– Clean Technology: Battery chemistry innovations, carbon capture solutions, and grid-scale energy storage startups.
– Enterprise Process Automation: Software platforms that automate complex workflows in healthcare, financial services, and industrial logistics.

Key Insights for Entrepreneurs and Investors
1. Prioritize Capital Efficiency: Startups focused on achieving operational profitability receive higher valuation premiums from institutional investors.
2. Strategic Exit Planning: Corporate M&A is serving as a primary exit route for venture-backed startups navigating prolonged IPO windows.
3. Focus on High-Moat Technologies: Deep tech and proprietary software architectures are securing the majority of growth-stage capital allocations.

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Finance

The Evolution of Digital Payments: Cross-Border Settlement and Central Bank Digital Currencies in 2026

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1 week ago

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August 5, 2026

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The infrastructure supporting global commerce is undergoing a major technological upgrade as real-time digital payment rails, cross-border settlement solutions, and Central Bank Digital Currency (CBDC) pilot programs achieve widespread commercial adoption. Financial institutions and fintech developers are reimagining payment processing to eliminate friction, lower transaction fees, and accelerate settlement speed.

Transforming Cross-Border Settlement Infrastructure
For decades, international corporate payments relied on legacy correspondent banking networks characterized by multi-day settlement delays, opaque fee structures, and high foreign exchange markups. In 2026, modern cross-border payment networks are enabling near-instantaneous settlement for international trade transactions.

Financial technology platforms are leveraging distributed ledger technology and real-time gross settlement (RTGS) interconnections to settle transactions in seconds. International trade participants benefit from reduced working capital requirements and minimized foreign exchange volatility risks during cross-border transfers.

Commercial Expansion of Central Bank Digital Currencies
Central banks representing major global economies are advancing CBDC initiatives from research phases into active commercial deployment. Wholesale CBDCs—designed specifically for interbank settlement and financial institution clearing—are demonstrating substantial efficiency gains in domestic and international transactions.

At the retail level, several nations have introduced public digital currency options alongside existing commercial banking networks. These sovereign digital payment channels aim to expand financial inclusion, lower consumer transaction fees, and improve the efficiency of government-to-citizen financial disbursements.

Open Banking and Embedded Finance Ecosystems
Alongside settlement infrastructure upgrades, open banking regulations and embedded finance frameworks are transforming merchant-consumer interactions. Commercial businesses across retail, travel, and business-to-business (B2B) services are integrating seamless payment APIs directly into their customer software interfaces.

Through open banking frameworks, consumers can initiate secure bank-to-bank payments without relying on traditional credit card networks, significantly reducing merchant processing fees. Integrated Buy-Now-Pay-Later (BNPL) options and point-of-sale credit facilities continue to expand, driving higher conversion rates for digital commerce platforms.

Strategic Financial Takeaways
1. Treasury Optimization: Corporate treasurers should leverage instant cross-border payment platforms to minimize liquidity buffers and foreign exchange exposure.
2. CBDC Integration: Financial institutions must prepare internal core banking systems to interface with emerging wholesale CBDC payment rails.
3. Merchant Fee Reduction: Enterprise merchants can lower payment processing overhead by adopting account-to-account (A2A) open banking checkout solutions.

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