China’s 15th Five-Year Plan Recommendations – Key Takeaways for Foreign Businesses

The 15th Five-Year Plan recommendations outline China’s strategy for high-quality, innovation-driven growth, focusing on industrial upgrading, technological self-reliance, increased domestic demand, and expanded openness, among other policy priorities. For foreign businesses, they signal both new opportunities in advanced industries and heightened competition for the period from 2026 to 2030, as China’s domestic firms move up the value chain.

The Central Committee of the Communist Party of China has released its official recommendations for the 15th Five-Year Plan, providing the most detailed outline yet of the country’s policy priorities for economic and social development over the next five years. Adopted at the fourth plenary session in Beijing from October 20 to 23, the recommendations set the framework for the 15th Five-Year Plan, which is expected to be formally released and implemented in March 2026.

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The 15th Five-Year Plan, which covers the years from 2026 to 2030, comes at a pivotal moment as China seeks to complete its transition toward an advanced, innovation-led economy, strengthen social welfare and living standards, and deepen structural reforms to support sustainable and balanced growth. As noted in the communique released following the close of the plenum: “The period covered by the 15th Five-Year Plan will be critical in this process as we work to reinforce the foundations and push ahead on all fronts toward basically achieving socialist modernization by 2035”.

The recommendations place industrial policy at the center of the 15th Five-Year Plan, prioritizing the modernization of traditional industries and fostering emerging sectors as the main drivers of high-quality growth. Other key priorities include technological self-reliance, boosting domestic consumption, and strengthening social services to support broad-based economic and social development.

For foreign companies, these policies create opportunities across a wide range of sectors, including advanced manufacturing, high-tech industries, green energy, digital and AI-driven services, and consumer-focused markets, while also signaling intensified competition from China’s increasingly innovation-driven domestic firms and a regulatory environment that prioritizes national strategic objectives.

Upgrading traditional industries and fostering emerging sectors

The recommendations stress that “the modern industrial system is the material and technological foundation of China’s modernization”, underscoring the importance China will place on cultivating the industrial base that underpins its economy during the 15th Five-Year Plan period.

In practical terms, high-quality development means moving the economy up the value chain, transitioning from reliance on traditional, labor-intensive manufacturing and infrastructure-led growth to a more sophisticated, high-value, innovation-driven model. This involves efforts to digitize, automate, and green traditional industries, and developing sectors such as advanced manufacturing, high-end technology, and modern services as the new engines of growth.

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The recommendations specifically call for “optimizing and upgrading traditional industries”, including sectors such as mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction. For manufacturing, the recommendations call for promoting technological transformation and upgrading, as well as digitalization, while developing intelligent, green, and service-oriented manufacturing.

While upgrading the traditional industrial base, the recommendations also call for striving to cultivate emerging and future industries to establish new strategic pillars of growth. This will involve accelerating the development of clusters in sectors such as new energy, new materials, aerospace, and the low-altitude economy, while advancing technological innovation, R&D, and product upgrades. Large-scale demonstration projects for new technologies and applications will help scale up emerging industries and strengthen the overall industrial ecosystem.

At the same time, the recommendations outline a forward-looking layout for future industries, promoting breakthroughs in quantum technology, biomanufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence, and 6G communications. It proposes innovative regulation, expanded venture investment, and stronger mechanisms for risk sharing. The recommendations also emphasize supporting specialized and innovative SMEs and fostering unicorn enterprises, alongside improving the quality, openness, and digitalization of the service sector to better integrate with advanced manufacturing and modern agriculture.

Boosting scientific and technological self-reliance

Technological self-reliance has become a core pillar of China’s national security and development strategy, especially as global tensions and export restrictions expose vulnerabilities in its innovation ecosystem. The recommendations aim to significantly improve scientific and technological self-reliance during the 15th Five-Year Plan by strengthening basic research, original innovation, and key core technologies. The goal is to achieve rapid breakthroughs in critical areas, including semiconductors, industrial machinery, advanced materials, biotechnology, and foundational software, expand sectors where China can lead globally, and deepen integration between scientific and industrial innovation. 

The recommendations also emphasize cultivating new quality productive forces (NQPFs), an innovation-driven approach that leverages cutting-edge technologies to create new industries, modernize traditional ones, and enhance global competitiveness. Enterprises are positioned as central actors, encouraged to lead national R&D initiatives, form innovation consortia, and increase investment in foundational research, supported by stronger intellectual property protection and higher R&D incentives. A network of regional innovation hubs, testing platforms, and science parks will help commercialize breakthroughs and foster a globally competitive innovation ecosystem.

Long-term innovation capacity is tied to education and talent development, with universities, research institutions, and enterprises working together to train scientists, engineers, and skilled workers aligned with national priorities. Parallel efforts under the Digital China initiative aim to integrate the digital and real economies, applying AI, industrial internet, and data technologies across industries, governance, and society.

Driving consumption and domestic demand

Revitalizing domestic consumption has become a top economic priority for China as the country grapples with sluggish household spending in the wake of the pandemic. A prolonged property market downturn, where much of household wealth is concentrated, has dampened consumer confidence and constrained disposable income. Against this backdrop, the recommendations call for China to “vigorously boost consumption,” “expand effective investment,” and “eliminate bottlenecks hindering the development of a unified national market”. These proposals align with China’s broader strategy to strengthen domestic demand as a central driver of growth and resilience within the “dual circulation” framework, in which the domestic economy serves as the mainstay of growth while the country remains open to global engagement.

On the demand side, the recommendations outline a comprehensive agenda to raise household incomes, stabilize expectations, and enhance consumer purchasing power. Key policy directions include increasing employment opportunities, reasonably expanding public service spending as a share of fiscal expenditure, and improving social welfare provisions.

Specific initiatives include:

• Expanding the supply of high-quality goods and services
• Expanding service consumption by easing market access and promoting the integration of business formats.
• Developing international consumption center cities and expanding inbound consumption.
• Increasing inclusive policies directly benefiting consumers
• Increasing government funding for social welfare and livelihood protection.
• Removing unreasonable restrictions on consumption in areas such as automobiles and housing
• Implementing staggered paid leave to encourage consumption.
• Strengthening consumer rights protection.

On the supply and investment side, the recommendations emphasize maintaining reasonable investment growth while improving efficiency. Government spending will focus more heavily on people’s livelihoods, key national strategies, and security-related projects, as well as on infrastructure and public service upgrades aligned with demographic changes. The plan also calls for the expansion of private-sector participation in major projects, the use of government investment funds to catalyze private investment, and deeper investment approval reform to increase transparency and efficiency.

The recommendations also emphasize the need to remove bottlenecks and obstacles hindering the construction of a “national unified market”. The national unified market, an initiative launched in 2022 and first proposed in the 14th Five-Year Plan (2021–2025), aims to dismantle provincial protectionism and fragmented regulations that historically hindered domestic consumption and economic integration.

The recommendations call for unifying foundational market rules, eliminating barriers, regulating local government behavior, and standardizing supervision and enforcement to create a fair, competitive, and efficient domestic market.

Specific recommendations include:

• Unifying market institutions and rules, including property rights protection, market access, information disclosure, social credit, mergers and acquisitions, and market exit mechanisms.
• Removing barriers in resource allocation, qualification certification, bidding and tendering, and government procurement.
• Regulating local government economic promotion activities to prevent protectionism and market segmentation.
• Addressing “involution” competition to promote fair and healthy competition.
• Unifying market supervision and enforcement, including quality control, administrative discretion standards, antitrust, and anti-unfair competition measures.
• Optimize profit-sharing and coordination between enterprise headquarters, branches, production sites, and consumption regions.

Promoting high-quality development through market optimization

The recommendations call for accelerating the construction of a high-level socialist market economy as a foundation for China’s modernization and high-quality development. In the current context of global uncertainty, structural economic challenges, and the ongoing need to shift toward consumption- and innovation-driven growth, this approach seeks to mobilize all economic actors, optimize resource allocation, and strengthen macroeconomic governance while maintaining the strategic role of the state in key sectors.

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To fully mobilize the vitality of economic actors, the recommendations emphasize deepening state-owned enterprise reforms to enhance competitiveness and optimize their structure, while simultaneously promoting the private sector. Legal protections for private firms, small and medium enterprises, and individual businesses aim to ensure equal access to resources, fair market participation, and the safeguarding of rights. Measures to strengthen property rights, oversight of enforcement actions, and modern enterprise systems are intended to encourage entrepreneurship and support the development of more world-class companies.

Improving the market-based allocation of factors of production is another key priority. The recommendations call for more efficient land, labor, capital, and technology markets, including integrated urban-rural land markets and functional capital markets. Policies to mobilize underutilized resources, such as idle land, vacant property, and surplus infrastructure, through mergers, bankruptcy, asset restructuring, and coordinated judicial enforcement are designed to ensure resources flow to their most productive uses, increasing overall economic efficiency and competitiveness.

The recommendations also aim to enhance macroeconomic governance and fiscal management. Coordinated fiscal, monetary, industrial, trade, and social policies are intended to foster domestic-demand-led and consumption-driven growth. Countercyclical and cross-cycle regulation, combined with optimized budgeting, taxation, and debt management, will support stable growth, employment, and expectations. At the same time, the development of a robust financial system, including strengthened central bank oversight, expanded technology-driven and green finance, improved capital market functions, and the promotion of the digital RMB, is intended to ensure financial stability and efficient capital allocation while advancing Shanghai as an international financial center.

Expanding high-level opening up

The recommendations emphasize expanding high-level opening-up and deepening international cooperation as a core part of China’s modernization strategy. In a global environment marked by shifting trade patterns and rising protectionism, China aims to use openness to drive domestic reform, innovation, and economic resilience, while more actively asserting its position on the global stage.

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Key proposals include expanding autonomous openness by aligning with high-standard international trade rules, improving service-sector market access, and accelerating regional and bilateral trade and investment agreements. Initiatives such as enhancing free trade zones, building the Hainan Free Trade Port, and integrating technology, service trade, and industrial development platforms are central to this effort. China also aims to promote the internationalization of the renminbi and participate in global economic governance reforms to foster a fair, inclusive, and cooperative international economic order.

The recommendations further emphasize trade innovation and diversification, encouraging balanced imports and exports, the growth of green and intermediate trade, service trade expansion, and digital trade development, including cross-border e-commerce. Export controls and security reviews will be strengthened to protect economic interests.

The recommendations also seek to expand two-way investment cooperation by creating a transparent and stable environment for foreign investment, reducing negative lists, supporting reinvestment, and facilitating secure cross-border data flows. Overseas investment management will be improved to encourage rational, orderly cross-border industrial and supply chain development.

What the 15th Five-Year Plan means for foreign businesses

The 15th Five-Year Plan presents a complex mix of opportunities and challenges for foreign firms across multiple areas. Industrial policy is being elevated as a central priority, with strong support for upgrading traditional industries, advancing advanced manufacturing, and promoting the green transition. This creates potential for collaboration in high-tech sectors, clean energy, and sustainable production, while also intensifying competition as domestic firms become more capable and globally competitive.

Technological self-reliance and the cultivation of NQPFs signal continued opportunities for foreign partnerships in frontier areas such as life sciences, renewable energy, digital technologies, and advanced manufacturing. At the same time, China’s drive for innovation-led independence means foreign companies may face reduced reliance on imported technologies in the longer term and more stringent regulatory oversight in sensitive or strategic sectors. Geopolitical dynamics and Western export controls could further complicate operations, requiring careful risk management and strategic alignment.

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The recommendations’ emphasis on stimulating domestic demand offers longer-term opportunities in sectors tied to lifestyle upgrades, services, healthcare, education, and digital consumption. If successful, broader consumer spending could expand markets for foreign goods and services, especially those aligned with quality, sustainability, and technology-enabled consumption trends. However, competition from maturing domestic industries and policy-driven incentives will require foreign firms to adapt to a more sophisticated and localized market environment.

High-level opening-up initiatives signal selective opportunities for investment, joint ventures, and participation in cross-border projects, particularly in sectors that support China’s modernization and strategic objectives. Institutional reforms designed to enhance market predictability and investor confidence may facilitate foreign participation, but access is likely to remain strategically guided toward industries such as advanced manufacturing, green energy, digital technologies, and high-value services.

Looking ahead to the formal release of the 15th Five-Year Plan, foreign businesses should watch for specific policy measures and targets that will shape opportunities and risks. These may include industrial policy priorities and sectoral targets, R&D expenditure goals, household consumption benchmarks, and specific commitments related to climate and renewable energy. Success in navigating this evolving landscape will depend on understanding China’s policy direction, identifying where foreign expertise complements domestic priorities, and adapting to a market increasingly driven by innovation, sustainability, and consumption-led growth.

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