The full text of the 15th Five-Year Plan proposal (referred to as the '15th Five-Year Proposal') passed by the Fourth Plenary Session of the Chinese Communist Party Central Committee last week was released on the 28th, and for the first time puts forward the idea of 'taking extraordinary measures' to drive decisive breakthroughs in key and core technologies such as integrated circuits, industrial mother machines, and basic software throughout the entire innovation chain, aiming to seize the strategic heights of technological development. It also calls for the building of a 'strong domestic market' and deep implementation of special actions to boost consumption.
Chinese President Xi Jinping emphasized that the external environment is severe and complex, and that both now and for some time to come, China must accelerate the formation of a robust domestic economic circulation system in order to use the stability of domestic circulation to offset uncertainties in international circulation.
The '15th Five-Year Proposal' is a guiding program put forward by the Communist Party Central Committee for the national economic and social development of 2026 to 2030. Relevant departments will draft the full '15th Five-Year Plan' based on it and submit it to next March's National People's Congress for review. The Proposal released on the 28th is about 18,000 words long and sets clear goals for the 15th Five-Year period, including making significant progress in high-quality development, a substantial improvement in the level of technological self-reliance and strength, and the further strengthening of national security.
China's Chip Manufacturing Still Subject to Foreign Constraints
China and the US have moved from a trade war to a technology war, but in core areas such as advanced chip manufacturing, China remains subject to others' control. For the first time, the Proposal calls for 'improving a new national system, taking extraordinary measures, and driving decisive breakthroughs throughout the entire innovation chain in frontier areas such as integrated circuits, industrial mother machines, high-end instruments, basic software, advanced materials, and biomanufacturing.' It also calls for 'deploying and implementing a number of major national scientific and technological projects,' increasing the proportion of investment in basic research, and generating more iconic original scientific results.
Compared with the '14th Five-Year Plan,' the '15th Five-Year Proposal' includes a noticeably larger section on technology and is more specific, likely related to the rapid rise of the artificial intelligence industry in recent years. At the Fourth Plenary Session, Xi Jinping said the Proposal highlights the leading role of scientific and technological innovation, but also emphasized that developing new quality productive forces requires certain natural endowments and that practical feasibility must be fully considered—'Work must be carried out scientifically and rationally, and in accordance with facts, to prevent acting blindly en masse.'
Building a Strong Domestic Market
Another key focus of the '15th Five-Year Proposal' is 'building a strong domestic market' to stimulate consumption and investment. Xi Jinping stated that the more severe and complex the external environment becomes, the more important it is to accelerate the construction of a new development pattern and firmly grasp the initiative of development. For now and for some time to come, efforts must be made to strengthen the domestic major circulation in order to use the stability of domestic circulation to offset the uncertainty of international circulation.
The Proposal calls for the deep implementation of special actions to boost consumption; fostering international consumption center cities and expanding inbound consumption; increasing the intensity of inclusive policies that directly benefit consumers; increasing government spending on social welfare; removing unreasonable restrictions on consumption in areas like cars and housing; implementing staggered paid leave; and strengthening consumer rights protection.
In recent years, competition between enterprises and between localities has become increasingly fierce, leading to 'involution.' The Proposal emphasizes 'resolutely eliminating blocking points and barriers that hinder the construction of a unified national market,' removing obstacles in areas such as resource access, qualification recognition, bidding and tendering, and government procurement; standardizing local governments' economic promotion activities; and eradicating local protectionism and market segmentation. It also calls for unified market regulation and law enforcement, strengthening anti-monopoly and anti-unfair competition judicial and law enforcement, and forming a market order of premium pricing and virtuous competition.