At the 2026 Tsinghua PBC Chief Economists Forum, held at Tsinghua University on September 19 under the theme "2026 China and the World Economy Review and Outlook — Global Rebalancing and International Monetary System Reconstruction," Yu Yongding, a member of the Chinese Academy of Social Sciences and a researcher at the Institute of World Economics and Politics, shared his insights on China's economic landscape.

Yu asserted that China's production efficiency is not low, contrary to some claims. From a labor productivity standpoint, China's per capita income growth ranks among the fastest globally. When examining the capital-output ratio, China's figure stands at approximately 7, placing it in the upper-middle echelon internationally. The notion that "China's production efficiency is low" stems from the idea that excessive investment leads to diminishing marginal returns, yet the data fails to substantiate such a conclusion.

Furthermore, Yu emphasized that China's infrastructure investment is far from reaching saturation. The "15th Five-Year Plan" has already outlined definitive targets, including six major backbone networks, thereby refuting the earlier misconception that infrastructure is already saturated. He argued that infrastructure investment should primarily be assessed by its social and long-term benefits rather than simple commercial returns. For instance, high-speed rail companies may operate at a loss, but the development spurred across provinces, cities, and counties along the routes is substantial; similarly, national defense spending cannot be measured by commercial metrics alone.

Yu contends that increasing infrastructure investment serves as an effective strategy to stimulate the economy. From the 1980s through 2008 and 2009, China's fundamental approach has relied on infrastructure investment, which is a distinct institutional advantage. Following such investment, economic growth accelerates, consumption rises, and consumption further consolidates growth, creating a virtuous cycle. Given that China's oil external dependence has reached 72%, the nation has made significant efforts to establish strategic reserves, underscoring the importance of infrastructure investment from a perspective of long-term development and national security.

He also stressed that China's fiscal position remains sustainable, and there is no need for excessive concern over the government leverage ratio. With global price dynamics shifting, China currently experiences the lowest price levels, while U.S. Treasury yields have surpassed 5%. Consequently, China faces fewer constraints in implementing expansionary fiscal and monetary policies, making this an opportunity window that cannot be missed. Once inflation takes hold and prices rise, the feasibility of future interest rate cuts becomes significantly more challenging.