Louise Loo Photo: Courtesy of Oxford Economics

 

The 20th Central Committee of the Communist Party of China (CPC) convened its fourth plenary session in Beijing from October 20 to 23. Participants deliberated and adopted the Recommendations of the CPC Central Committee for Formulating the 15th Five-Year Plan for National Economic and Social Development, according to a communique of the meeting released on October 23, Xinhua News Agency reported.

China should build a modernized industrial system and reinforce the foundations of the real economy. The country should achieve greater self-reliance and strength in science and technology and steer the development of new quality productive forces. It should build a robust domestic market and work faster to foster a new pattern of development, said the communique. 

The world's largest manufacturing economy is seeking to evolve from the factory of the world into the innovation engine of a multipolar global order. But this shift is not about retreating from globalization - it is about re-engineering China's place within it.

The 15th Five-Year Plan (2026-30) is set to extend the key themes for economic development of the 20th National Congress of the CPC and the fourth plenary session of the 20th CPC Central Committee - including technological self-reliance and high-quality development. 

In practice, this means a gradual pivot toward a growth model powered by industrial upgrading, digital infrastructure, and domestic demand. Continuity will be as important as change. The new plan will evolve within the framework of "dual circulation," the strategy that takes the domestic market as the mainstay while allowing the domestic and international markets to reinforce each other.

The contours of the shift are visible. High-value exports such as machinery, batteries, and electric vehicles now dominate China's trade profile. This reconfiguration is not accidental; it is a strategic adaptation to tariff pressures and a more fragmented global trading system. For foreign companies, the coming years will bring a new operating reality: updating localization requirements for research and development, data, and supply-chain participation. In effect, China is turning the emphasis of technology self-reliance into a sector-by-sector implementation strategy, reshaping how global firms engage with the Chinese market.

This recalibration reflects China's reading of its own development priority. In the face of Western export controls on semiconductors and other sectors, China's dependence on some advanced technologies has narrowed as the country pours capital and policy support into domestic capacity in machine tools, chips, and critical minerals. Industrial policy has become China's main macro lever - the instrument through which it aims to secure economic resilience.

Alongside trade and investment goals, digital cooperation will be a central theme in the new blueprint. China's digital cooperation is expected to set new standards, update cyber-security rules, and enforce data management. For multinationals, that translates into deeper partnerships with local firms amid China's expanding digital ecosystem, from cloud infrastructure to industrial artificial intelligence.

At home, China's digital agenda is about more than technology; it is a push to build a unified national market and harmonize local regulations. This is a structural productivity reform. By integrating data and reducing duplication, China is expected to unlock growth equivalent to a fiscal stimulus - without widening budget deficits.

If past five-year plans were defined by resilience amid challenges, this one will be defined by quality development. The plan is expected to bind innovation policy to social reform. Efforts to expand pensions and improve healthcare are framed not only as welfare concessions, but also as productivity tools to mobilize labor and revive consumption.

This fusion of "innovation" and "common prosperity" is emerging as a key principle of China's new development phase: the conviction that social equity and technological progress must advance together. China's underlying calculus is pragmatic - that durable growth, anchored in innovation and household demand, remains its strongest card in global competition.

The world should brace for a more confident China, one that depends less on foreign demand, is more assertive in setting digital and industrial standards, and remains indispensable to global supply chains. The 15th Five-Year Plan (2026-30) will redefine how China connects to the world - on its own terms.

The author is lead economist of Asia Economics at Oxford Economics. bizopinion@globaltimes.com.cn