China's economy is poised to extend its steady growth momentum into 2026, with stepped-up policy support for domestic demand and a faster innovation-led transition to cushion any external uncertainties, officials and analysts said.

Monetary policy, they said, is positioned to provide continuous, targeted support for China's economic transition as recent moves on structural tool rates and quotas underscored a continued focus on supporting key sectors.

They made the comments ahead of the release of China's 2025 economic data on Monday, which international institutions widely expect to show a GDP growth of around 5 percent, outperforming earlier expectations and underscoring the economy's resilience as it enters the 15th Five-Year Plan (2026-30) period.

"Looking ahead, China's economy is supported by its super-large market and complete industrial chain," said Zou Lan, vice-governor of the People's Bank of China, the country's central bank.

"The integration of scientific and technological innovation with industrial innovation is accelerating, new growth drivers are gaining momentum, domestic demand potential continues to be unleashed, and domestic and international circulation are running more smoothly."

All these fundamentals underpin China's solid economic outlook, Zou said at a news conference, which will support the renminbi exchange rate "moving in both directions with flexibility" despite external uncertainties.

Echoing Zou's views, Goldman Sachs said in a report that the US investment bank expects China's economic growth to stay generally steady in 2026 from a forecast of 5 percent for 2025, supported by a policy-backed investment rebound, the potential of service consumption, resilient export growth and further moves of monetary and fiscal easing.

Indicative of a pro-growth monetary policy stance, the central bank announced on Thursday it would cut rates on targeted policy tools, effective from Monday, while expanding related quotas to boost lending in key areas, including setting 1 trillion yuan ($143.4 billion) in central bank lending quota to support small and medium-sized private firms.

The central bank vice-governor also signaled a readiness to introduce broad-based easing measures, saying that there remains room this year for cuts to interest rate benchmarks and reductions in the reserve requirement ratio or RRR — the proportion of deposits that banks must hold as reserves, which now stands at 6.3 percent on average.

Zou said the strengthening coordination of macro policies will help improve the match between supply and demand, reinforcing the foundation for a recovery in price levels.

He noted that China's core consumer price index — excluding food and energy — rose 1.2 percent year-on-year in December and has stayed above 1 percent for four consecutive months, which is seen as a sign of sustained recovery in consumer demand.

"Looking forward, we believe that domestic consumption in China will gradually recover," said Kelly Zhang, general manager of Bimbo China, the Chinese unit of Mexican multinational food company Grupo Bimbo.

"This will give Bimbo confidence to deepen investment in China, helping speed up geographic expansion and category expansion in the market."

Zhang Wei, an analyst at Caitong Securities, said the central bank's latest policy messages are putting greater emphasis on addressing structural challenges through targeted, precise support for technological innovation, private businesses and efforts to expand domestic demand, a fine-tuning that fits the Chinese economy's structural transition.

With the central bank stressing keeping overall financing conditions relatively accommodative as well, Zhang said that the likelihood of RRR reductions and interest rate cuts in 2026 is rising, and that the timing may depend on growth and risk dynamics, with exports and local fiscal conditions being key variables to watch.

Contact the writers at zhoulanxv@chinadaily.com.cn