December 16, 2025, Beijing — The recently concluded Central Economic Work Conference has laid out a clear roadmap for China’s economic priorities in 2026, designating “expanding domestic demand and stimulating consumption” as the top economic task for the coming year. In a notable shift from past approaches, the conference emphasized the need to simultaneously strengthen both supply and demand sides—a recognition that China’s current economic challenge lies in a pronounced structural imbalance: robust supply capacity coupled with relatively weak demand.
The conference explicitly identified this mismatch as a key bottleneck constraining high-quality development, calling for systemic reforms to address it. Significantly, policymakers are now linking “expanding domestic demand” with a renewed push to combat so-called “involutionary competition”—a term widely used in China to describe destructive, low-efficiency rivalry characterized by overcapacity, price wars, and diminishing returns.
In a policy upgrade from previous “comprehensive rectification” efforts, the government announced it will “deeply advance the governance of involutionary competition,” signaling a stronger commitment to reshaping industrial ecosystems and eliminating wasteful practices. Analysts interpret this as a clear indication that curbing involution will be a central theme throughout 2026, working hand-in-hand with demand expansion to drive structural optimization and efficiency gains.
On the industrial front, the conference called for launching a “new round of high-quality development initiatives for key industrial chains,” with targeted support for sectors critical to plugging technological gaps (“making up for weaknesses”) and reinforcing competitive advantages (“strengthening strengths”). Against this backdrop, the organic silicon industry is emerging as a prime candidate for policy support due to its significant potential in high-quality development.
Organic silicon—a foundational material widely used in strategic emerging sectors such as new energy, electronics, construction, healthcare, and hydrogen energy—boasts high technical barriers, strong value-added characteristics, and a pivotal role in China’s green and low-carbon transition. With enhanced national backing for advanced chemical new materials, the market anticipates rapid expansion of new growth opportunities in this sector.
Recent market dynamics already reflect this positive trajectory. Despite cost pressures from upstream raw materials—such as platinum-based catalysts, whose prices surged after platinum futures hit their first-ever daily trading limit on the Guangzhou Futures Exchange—the organic silicon industry has maintained stable operations. Leading producers report robust order backlogs, with delivery schedules extending into the Lunar New Year, and mainstream product prices remaining steady, underscoring the sector’s resilience and internal growth momentum.
Experts note that under the dual policy thrust of “demand expansion + anti-involution,” the organic silicon industry is well-positioned to move beyond its historical reliance on capacity-driven growth and cutthroat pricing. Instead, it is transitioning toward a high-quality development model centered on technological innovation, product upgrading, and green manufacturing—aligning closely with national strategies for industrial chain security and modernization.
Looking ahead to 2026, as policy dividends materialize and market order improves, the organic silicon sector—and other advanced foundational materials—could become vital pillars in China’s broader economic transformation toward balanced supply-demand dynamics and enhanced quality-efficiency outcomes.
