China's drive to strengthen its domestic market is expected to provide a cushion not only for its own economy but also for Asian neighbors facing a tougher global trading environment in 2026, according to analysts.

Wrapping up its annual Central Economic Work Conference on Dec 11, Beijing pledged to make expanding domestic demand a top priority in the year ahead. The move is seen as critical for export-oriented Asian economies, which are contending with weaker overseas orders amid higher US tariffs.

Analysts said China's efforts to balance external pressures with internal resilience offer potential spillover benefits to supply chains across Asia.

Reuben Mondejar, professor at the IESE Business School in Spain, said the agenda set for 2026 is "mostly aimed at domestic national economic dynamics". Despite its domestic focus, Mondejar said China's policy plans would still impact other Asian economies in the form of increased imports from China.

China plans to boost its domestic market by implementing a consumption enhancement campaign and urban-rural income growth plans, optimizing consumption policies, removing unreasonable restrictions hindering consumption, and stimulating service consumption potential, according to the statement released at the end of the two-day conference.

Supporting consumption remains a policy priority for China, according to the latest research notes by Nomura.

"Last year, the Central Economic Work Conference placed boosting consumption as the top priority of the policy agenda for 2025. From this year's readout, Beijing maintained boosting domestic demand as the primary task for 2026, consistent with our expectations," Nomura said in its report.

For Amitendu Palit, a senior research fellow at the Institute of South Asian Studies at the National University of Singapore, this is a good time for China to focus on its domestic market as it has managed to build solid economic fundamentals as demonstrated by its huge foreign exchange reserves and the higher living standards of its citizens.

He said China's policy focus on the domestic market will have a significant impact on the region that has long viewed China as a manufacturer and exporter but not as a consumer.

"We have been looking at China more as a producer of a large number of goods. A lot of Asian economies, along with a lot of Western economies, have been benefiting from their trade with China because they have been sourcing from China," Palit told China Daily.

Place for consumption

But he said most of these trading countries "tend to overlook China's ability as a market, as a place for consumption".

Palit said China is the world's second-largest economy and as such, opening up its markets to more imports would benefit many Asian economies especially at a time when the US has raised tariffs against dozens of its trading partners.

He also sees a new pattern of manufacturing emerging among the members of the Association of Southeast Asian Nations where more products will be made specifically for export to China.

ASEAN, as a regional bloc, is one of China's closest neighbors and biggest trading partners.

China will continue to expand opening-up to advance win-win cooperation across multiple fields, with a focus on advancing institutional opening-up and expanding openness in the service sector, according to the statement released at the end of the conference.

Malaysia-based private equity investor Ian Yoong Kah Yin said China's further opening-up will expand trade flows and stabilize global supply chains.

He said a resilient supply chain may also lead to a structured common market between China and ASEAN countries.

"Greater trade between China and ASEAN countries will increase the reliance of these nations on each other. Opening-up will therefore lessen the possibility of economic hegemony by global powers," Yoong said.

He said China and ASEAN's trade relationship is "dynamic" and the two sides have succeeded in deepening trade cooperation especially in the manufacturing and agricultural sectors.

prime@chinadailyapac.com