Illustration: Liu Rui/GT

Editor's Note:

2026 marks the commencement of China's 15th Five-Year Plan (2026-30), a pivotal phase in the nation's medium- to long-term development. A successful venture starts with a good plan and with clear goals set. At this critical juncture, where a profound restructuring of the global order converges with a tipping point in the technological revolution, China's Five-Year Plan is poised to inject momentum and certainty into global development, charting a steady course for the new journey ahead.

In its newly launched "New Blueprint, New Opportunities" series, the Global Times (GT) invites Nobel laureates in economics, former central bank governors, core decision-makers of international organizations and renowned economists from countries with diverse civilizations, different economic systems and stages of development, to deeply analyze how the 15th Five-Year Plan will reshape the underlying logic of China's interaction with the world and to explore the "anchor of certainty" and "new paradigm of development" this plan offers for a turbulent world.

In the second installment of the series, GT reporter Wang Wenwen talked to Margit Molnar (Molnar), head of the China Desk of the Organization for Economic Cooperation and Development (OECD) Economics Department. Molnar shared her confidence in China's economy and development.


GT: China recently released its economic data for 2025, with its GDP growth at 5 percent, demonstrating a kind of reliability the world expects, as well as a sustainable development logic. Looking ahead to the next five years, why are you confident in China's economy and development?

Molnar: Following a strong performance during the first three quarters of 2025, the announcement of 5 percent GDP growth in 2025 was not a surprise. Even though it was clear from high frequency and soft data that the last quarter would be weaker, it would have been difficult to go below 5 percent for the whole year. The structure of growth at first glance suggests that growth is becoming more sustainable, as it is increasingly relying on consumption. This also bodes well for long-standing calls to rebalance growth from investment to consumption. 

It is worth noting that the driver of this consumption boom is the trade-in program, which is being extended to an increasing number of goods. However, to unleash the consumption potential, precautionary savings need to be reduced. This would involve boosting incomes and a stronger social safety net. Pensions need to provide a minimum standard of living for older people to reduce savings for old age. This would involve major reforms of the pension system and unification at the national level. Sustainability would also require higher contributions to provide greater benefits in the case of the rural scheme. Unemployment insurance should be extended to all workers so that their standard of living is secured in between jobs.

Looking ahead, I am confident in China's development because of the large room to unleash the consumption potential by implementing approaches as discussed above, as well as large potential for productivity-enhancing structural reforms. Those include addressing administrative monopolies in services industries, which would boost efficiency-enhancing competition, strengthening product quality and consumer protection, which would help reduce excessive competition in manufacturing, subjecting all industry support to cost-benefit analysis, so that public funds are not wasted, and excess capacity is worked off, just to mention a few.

GT: What policies in China's 15th Five-Year Plan do you see as continuous and adaptive?

Molnar: The essence of the five-year planning system is to maintain the country's long-term vision while regularly adapting its methods to address new challenges. Thus, this system balances continuity with flexibility and adaptation. 

The current 15th Five-Year Plan has kept some of the major pillars of previous plans, such as high-quality development, industrial upgrading, innovation, further opening-up and accelerating the green transition. High-quality development is the overarching guiding theme for both medium-term and long-term development. As the name suggests, the focus is shifting from quantity to quality of economic growth. It should be noted that higher quality growth is not necessarily low growth. China's demographics and rapid catching up with the developed countries imply that the growth rate of the economy will also converge toward the levels of developed countries.

The 15th Five-Year Plan also exhibits flexibility and adaptation in pursuing longer-term objectives. Technological innovation needs to be relevant to be effective, presupposing a modernized industrial system that is capable of adopting technological innovations and turning them into efficiency-enhancing drivers of growth. This is one new aspect, as without a modern industrial system, many technological outputs would go unused. To unleash the potential of new technologies, institutions also need to evolve: The education system needs to embrace the latest technological tools to equip young generations, and regulatory systems need to be reformed to facilitate the rollout and effective use of new technologies. Such new elements reflect a more holistic view on how to strengthen major pillars of the system. This more holistic approach is also seen in reinforcing domestic demand, which is another key pillar. To boost consumption in a sustainable way, policies need to go beyond macroeconomic stimulus measures, and more profound structural reforms are needed.

GT: According to data from China's National Bureau of Statistics, China's research and development (R&D) spending intensity surpassed the average of economies in OECD for the first time in 2025. Among China's plans for its 15th Five-Year period, technology and innovation has played an increasingly important role. As per your research, what key factors can drive R&D toward the high-quality development that China is currently pursuing?

Molnar: China has been steadily increasing its R&D spending over the past decade or two. While spending is needed for innovation to take place, spending on research and development alone does not guarantee outcomes. High-quality development should indeed mean development based on continuous productivity improvement, which, in the long term, is possibly only achievable through innovation. 

A key aspect is the commercialization of innovation outputs. While commercialization is the major driving force behind innovation in industry, different incentives exist in research institutes and universities. Academic research should be laboratory tests and trials and obviously its commercialization rate is much lower than that of industry research. However, if it is too low, it implies a waste of public funds and a lack of expected efficiency gains. Thus, the relevance of research is a key factor in determining its impact on the economy. Finally, collaborative research is the trend in the global arena, and there is a need for China to build up greater social capital. 


GT: OECD countries typically guide medium- and long-term development through legislation, budgets or industrial policies. From an international perspective, what do you think are the most prominent characteristics and comparative advantages of China's governance model, centered on its five-year plan, in ensuring long-term policy continuity and translating national strategies into concrete growth results?

Molnar: China's five-year plans on the one hand imply strict implementation, but on the other hand provide vision and certainty, which many countries, including OECD countries, lack. In other countries, election cycles can lead to wasteful spending of budgetary funds in case of government change, in particular if the incoming government's priorities are very different. This can result in unfinished metro lines, highways or other infrastructure, which, during a full election cycle, can deteriorate to a great extent. The medium-term budget framework used in OECD countries provides a certain degree of certainty, however, incoming governments sometimes revamp them. To avoid those pitfalls, we are recommending establishing long-term visions for infrastructure needs, in particular in countries with low stock of infrastructure or those whose infrastructure is in need of renovation and modernization.  

China is in the fortunate position of being free from such pitfalls. Long-term vision, certainty and continuity are crucial to embark on the construction of major infrastructure projects. Five-year plans, embedded in even longer strategies, are important governance tools in China to capture global trends and set priorities. With China's governance model, a major task is how the national-level priorities trickle down to the province, city and county levels, taking into account their potentials and based on market principles.

GT: Many observers point to China's "strategic resolve" when analyzing China's long-term plans. If you look at areas that require long-term investment, such as infrastructure or industrial policy, what do you think are the key differences between the actual effects of China's "strategic resolve" and the policy models commonly seen in the West?

Molnar: China's model is indeed effective in setting the direction based on emerging trends, and due to its flexible economy, switching to producing what is needed is much faster than elsewhere. This is partly due to the lack of strong business lobbies and trade unions that often slow changes in other countries. A vibrant, profit-seeking private sector is also key to switching production at a rapid pace in China. In addition, labor regulations also allow for quick and low-cost switching to new industries and technologies, while in OECD countries collective dismissal is difficult and costly. 

China's population size implies that a large number of young people enter secondary and tertiary education each year, and with timely adjustment of the curricula, skills can be trained and made available on a large scale. The adjustment of curricula at all levels of education is much more adaptive to changes and reflects what is needed in China compared to other countries. Majors like machine learning or AI are not available in many countries, but they have already been available for a decade in China.  

The above views reflect those of the interviewee and not of the OECD or its members.