The People’s Republic of China‘s 15th Five-Year Plan came into effect this week. Let’s see how Beijing intends to approach this new phase, with the ambition to keep control of its destiny in a world more unpredictable than ever.
In the draft plan submitted to the Chinese Parliament, then validated this week, we see the way in which China wishes to adapt to its internal structural challenges as well as international trade tensions, even as its economic growth gradually slows down.
With a domestic market still in difficulty, still penalized by the real estate sector, China has set its growth target for 2026 between 4.5 and 5%, the lowest level since 1991.
If technological domination constitutes the main priority of this plan, particular attention is also paid to the internal market. Household consumption represents only about 40% of China’s GDP, compared to 69% in the United States.
Chinese leaders have understood this well; numerous measures aimed at supporting consumption and adjusting supply to demand have already been undertaken. If the Gini index (measure of inequalities) has improved significantly over the past fifteen years, it remains less flattering than in Western European countries, for example. China is therefore banking on an increase in income and a better distribution of it to strengthen the role of its population in growth and stabilize it.
In the objectives, we find the intention to consolidate the bases of an industrial upgrade. The five-year plan provides for a strategic allocation of resources towards the modernization of traditional industries, notably steel, textiles and construction, but also towards emerging industries and, of course, towards the technologies of the future.
The most important axis undoubtedly remains innovation and technological domination. We can expect to see China move ever closer to self-sufficiency in many critical areas, in what amounts to a true technological race to reign.
In the document, “artificial intelligence” is cited more than 50 times, according to Reuters. This technological domination appears in fact to be the best response to the demographic risk facing China. With the workforce shrinking, the only viable response is increased productivity. The document also designates the technological sector as the “new productive forces of quality”.
Such an ambition cannot be achieved without full control of the critical resources necessary for this development. We spoke of a desire for self-sufficiency: this extends from expertise to the control of critical resources. China intends to inoculate itself against the export controls it suffered last year.
China also intends to move forward in many other areas, such as green energy, even if no targets have been set for reducing coal consumption. Also in agriculture, with a desire to reduce inequalities with urban residents, as well as increased but selective openness to the world, notably with easier visas and growing soft power.
