China has formulated a five-year growth plan based on technological self-sufficiency

China has pledged to further develop its economy, redoubling efforts in its pursuit of technological self-sufficiency. The country's government has outlined the key priorities of the new five-year plan, which will begin in 2026, but with little mention of pressing issues, UNN reports, citing Nikkei Asia.

Details

The Central Committee of the Communist Party concluded its fourth plenum in Beijing, after which the state news agency Xinhua published a communiqué on what was discussed during the four-day session.

The record shows a strong focus on technological innovation and self-sufficiency, consistent with the current five-year plan, which ends this year. China has enhanced its global competitiveness in some areas highlighted in the previous plan, such as electric vehicles and biotechnology. The development of its own semiconductor supply chain has also become a key task amid growing geopolitical tensions.

China, according to the document, will focus on intelligent, green, and integrated development, calling on the manufacturing sector to "maintain a reasonable share" of the economy. Officials still emphasized the growth of domestic demand as a "strategic priority," hinting at expectations for greater efforts to stimulate consumption. The creation of a "unified national market" was also mentioned, along with a call to open channels for social mobility and improve income distribution along with the social security system.

China's exports continue to grow despite higher tariffs from the US, but a deep downturn in the real estate market and weak confidence have reduced domestic demand, fueling price wars across industries. However, the housing market was only briefly mentioned in the report, with an emphasis on "high-quality development."

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And despite repeated government promises of "anti-involution" measures earlier this year — Beijing's term for addressing overcapacity in the industrial and renewable energy sectors — the plenum report made no mention of supply-side policies.

Regarding overall economic growth, China stopped including a specific target when it published the current five-year plan, instead calling for "sustainable and healthy" expansion. Analysts say growth needs to be maintained at around 4.5% per year to achieve the goal of doubling gross domestic product by 2035 compared to 2020.

China's official data appears to be on track to meet this year's annual growth target of "around 5%," but maintaining momentum in the long term is widely seen as a challenge, not least due to demographics, after the population declined for the third consecutive year in 2024.

A press conference is scheduled for Friday morning to explain the communiqué, and a more detailed version of the recommendations is expected later. The final version will be approved at the National People's Congress next year.

In addition to policy, there were questions about the personnel preparing for the plenum, amid an escalating purge of high-ranking officials. The communiqué noted that 168 members and 147 alternate members attended the fourth plenum. The current Central Committee originally had 205 members and 167 alternate members.

The communiqué officially announced the expulsion of 14 members from the Communist Party of China, including former People's Liberation Army officials led by He Weidong, who was second in command of the Chinese armed forces.

The results of the plenum offer insight into how China sees itself ahead of a crucial week of trade talks with the US. Officials from Washington and Beijing, including Treasury Secretary Scott Bessent and Vice Premier He Lifeng, are scheduled to meet in Malaysia from Friday to Monday to ease tensions over export controls, tariffs, and other issues. This could be followed by a meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea next week.

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Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, told reporters in Tokyo on Thursday that China is likely to follow "more of the same path" in the coming years. This would mean "doubling down" on efforts to modernize industrial production, as it relies on export growth.

While there will be a big push for new technologies, especially fundamental research and development of critical technologies, she said that "exports are a fixed bet."

Based on expectations that the next five-year plan will be directed in this direction, Garcia Herrero said that Natixis maintains its forecast for China's annual growth to slow to 2.3% in 2035. She called this a "structural slowdown" as the country's aging population accelerates, which will have "huge implications for Japan and the rest of Asia."

Addition

Chinese company Unitree Robotics unveiled a new bionic humanoid robot - H2. The company published a video of its demonstration on Monday, October 20, on its YouTube channel.