BEIJING: China is set to wire its economy with technology and ramp up a push for self-reliance in critical industries over the next five years, in a bid to power growth and get ahead in competition with the US.
It will also expand domestic demand with a “notable increase” in household consumption, according to the country’s foremost policy blueprint for 2026 to 2030, though the 135-page document stopped short of setting a concrete target.
A draft outline of the 15th Five-Year Plan, which will shape government priorities through the country over the next half-decade, was submitted for review on the first day of China’s annual legislative session, which runs from March 5 to 12.
A key theme is boosting technological self-reliance – a task that has acquired fresh urgency as China’s rivalry with the US deepens.
China will “substantially raise its capacity for self-reliance and strength in science and technology”, the document said, pledging to increase nationwide spending on research and development by at least 7 per cent each year till 2030, on a par with targeted outlays over the last five years.
Beijing is targeting speedy breakthroughs in core technologies, and will take “extraordinary measures” to make advancements in fields like chips and high-end equipment, according to the draft road map.
Meanwhile, the country will continue to strengthen its competitive advantage in sectors such as rare earths, rare metals and super-hard materials, the road map noted.
The critical minerals used in everything from smartphones to fighter jets are a source of leverage that Beijing has wielded, including in trade talks with the US.
Beijing has lowered its economic growth target for 2026 to 4.5 per cent to 5 per cent, its slowest pace in decades, as policymakers leave room for structural adjustments and reforms.
Augmenting China’s vast industrial base to support its high-tech ambitions remains a focus for the country’s leaders through the end of this decade. China will “build a modern industrial system with advanced manufacturing as its backbone”, the document said.
Aside from upgrading factories with smarter production lines, policymakers are looking to quicken the development of emerging sectors like robots and aerospace, and promote future industries like quantum technology and brain-computer interfaces.
Beijing is also gunning to reap real value from science and tech advances, calling for speedier development of application scenarios and ecosystems.
The document highlighted an existing “AI Plus Initiative” that aims to embed the technology across the economy, from government offices to factories, and also urged more state procurement of home-grown innovative products.
Another key priority is to expand domestic demand over the next five years, with the road map conceding that “the problem of unbalanced and inadequate development remains prominent” in China’s economy with “choke points in domestic demand”.
Policymakers pledged to “achieve a notable increase in household consumption as a share of GDP” and centre consumer spending to increasingly drive China’s economic growth, the road map said.
China’s household consumption forms about 40 per cent of its gross domestic product, according to the latest World Bank data for 2024, lagging the global average of about 55 per cent in 2022.
Lifting consumer spending would help rebalance a growth model heavily reliant on exports, and gird the economy against external shocks or tariff hikes.
Growth in domestic demand, however, has remained stubbornly slow, with consumers worried about their job and financial prospects, given China’s tepid economic growth. Retail spending in China grew 3.7 per cent in 2025 and had slowed to 0.9 per cent at the end of the year.
To coax reluctant consumers to open their wallets, Beijing has since 2024 bankrolled subsidies on goods from cars to washing machines, and in 2026 issued a plan to boost spending on services like tourist trains and eldercare.
The draft five-year plan urged the advancement of such special initiatives to spur consumption, and concurrently called for efforts to boost employment and incomes including through social security and government transfers.
Even so, policymakers did not set a target for household consumption growth, which would have signalled stronger political will for this push.
The plan also committed policymakers to the construction of a “unified national market” to address the choke points in growing domestic demand.
Steps to address such blockages include removing restrictions in government bidding to attract a wider range of vendors, improving logistics networks to lower transport costs and strengthening fair competition laws to eliminate monopolies, the plan added.
The sprawling road map also guides policy in sectors spanning the environment and culture to security and defence.
Lawmakers will discuss the document over the coming days and are expected to approve a finalised version on March 12 when the legislative session concludes.
China director for political risk consultancy Eurasia Group Wang Dan said that China’s move to upgrade its industries with more advanced technology and grow its high-tech sectors is “highly feasible”.
Companies in these fields can also benefit from the ease of pivoting to other sectors when there are inefficiencies or issues of overcapacity, said Dr Wang, who is based in Singapore. She gave as example how electric vehicle suppliers can also serve robotics firms because the inverters, materials and batteries are interchangeable.
However, she cast doubt on China’s push to grow consumption with the latest growth target of 4.5 per cent to 5 per cent, adding that “you cannot have a lower growth target and improved household income at the same time”.
“(So) high-quality development in industrial production is still the key (to China’s growth). Consumer market is secondary,” Dr Wang added.
Professor of Economics Hu Guangzhou at the China Europe International Business School in Shanghai, however, saw the lower growth target as a positive sign meant to help local officials get used to taking a longer-term perspective towards growing consumption.
Previous higher target rates had encouraged local officials to turn to investment, including land sales, to stimulate short-term growth, resulting in China’s massive property bubble.
Top policymakers had in recent years taken steps to address the ballooning problem, with home prices still falling and leaving the Chinese feeling increasingly poor.
“So, the lower target is meant to give officials space to find more sustainable ways to grow,” he said. “After all, local officials have limited policy actions to take to stimulate consumption.” - The Straits Times/ANN
