Strategic Shift Toward Technological Independence
China’s leadership is reportedly preparing to double down on technological self-reliance in its next five-year economic plan, according to analysts monitoring the country’s development strategy. The Communist Party’s Central Committee began deliberations this week on the 15th five-year plan, which sources indicate will prioritize state-led investment in cutting-edge technologies as tensions with the United States over trade and technology continue to intensify.
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The planning process follows a pattern established by the Five-year_plans_of_the_Soviet_Union but has evolved to address contemporary geopolitical challenges. “The meat of the 15th five-year plan probably will be to show determined support for technology, innovation and security,” said Hui Shan, chief China Economist at Goldman Sachs, according to reports.
Building “New Productive Forces”
Analysts suggest the forthcoming plan will continue channeling resources toward strategic emerging industries, building on policies that during the current plan period helped China achieve breakthroughs in green technologies like electric vehicles. These developments have triggered trade tensions with Western economies whose core industries face new competition.
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According to Yuhan Zhang, principal economist of the China Center at the Conference Board, the next five-year plan will “continue channelling resources towards strategic emerging industries such as AI, new energy, new materials, advanced manufacturing, and ‘future industries’ like brain-computer interfaces.” The approach reflects what Beijing describes as developing “new productive forces” to expand manufacturing capabilities while creating jobs and attracting private capital.
Consumption Challenges Amid Technological Push
While technological advancement appears central to the plan, the government also faces pressure to address weak domestic consumption. China’s household consumption represents approximately 40% of GDP—significantly lower than the 68% rate in the United States—amid persistent deflationary pressures and a prolonged real estate downturn.
Some economists speculate that China may introduce numerical targets to boost consumption share of GDP. “The government may consider setting an explicit official target for the consumption share of GDP,” said Ning Zhang, senior China economist at UBS, according to the analysis. Such a move would signal serious commitment to economic rebalancing amid broader market trends affecting global economies.
Geopolitical Context and Implementation
The technological focus occurs against a backdrop of what analysts describe as darkening perceptions in Beijing of the external environment. “Perceptions in Beijing of the external environment have darkened, with US politics intensifying global uncertainty and economic risk,” said Neil Thomas, fellow on Chinese Politics at the Center for China Analysis at the Asia Society, in a report examining the geopolitical landscape including related innovations in international relations.
The emphasis on technological sovereignty also aligns with broader industry developments as nations increasingly prioritize supply chain security. President Xi Jinping’s push for “self reliance” responds not only to technological competition but also to what the Communist_party perceives as potential isolation from Western technological ecosystems.
Economic Growth Projections
While the plan’s full details won’t emerge until March, economists are already projecting modest growth targets. Standard Chartered economists Shuang Ding and Hunter Chan estimated in a recent note that “China’s potential growth could average 4.3 per cent in the next five years,” below what would be required to fulfill Xi’s earlier goal of doubling GDP between 2020 and 2035.
The planning process occurs alongside significant political developments within the party leadership, with reports indicating numerous Central Committee members face investigations. This political context may influence implementation of the economic strategy as the government seeks to advance technological capabilities while managing domestic economic challenges.
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