(Staff post from The CHINA BRIEFNG on 02 June 2025.)
2025 is a pivotal year in China’s policy cycle,
marking the close of the 14th Five-Year Plan and the lead-up to the 15th, which
will chart the country’s course from 2026 to 2030. President Xi Jinping is
already steering discussions with senior officials on key priorities, while
state media mobilize public input ahead of the CPC Central Committee’s expected
approval this fall.
2025 is a pivotal year in China’s policy landscape,
marking the final year of the 14th Five–Year Plan and setting the stage for the
Communist Party of China (CPC) Central Committee to put forward proposals for
the 15th Five-Year Plan in the fall.
China’s political leadership is currently laying the groundwork for the release of this pivotal document, which will shape the country’s social and economic development over the next five years. President Xi Jinping has held meetings with senior officials to discuss key priorities for the new plan, while state media have launched a national campaign to gather public input and feedback.
The 15th Five-Year Plan, which will cover the
period from 2026 to 2030, is expected to focus on improving economic
resilience, boosting China’s technology and innovation capabilities, and will
be approved during a CPC Central Committee plenum expected to take place in the
fall.
What are China’s Five-Year Plans?
China’s five-year plans are the country’s most
authoritative policy blueprints, outlining strategic goals for economic and
social development over five-year periods. Originating with the founding of the
People’s Republic of China in 1949, these plans set national priorities,
particularly in areas such as economic growth, industrial development,
education, and social development, and serve as binding guidelines for all
local, provincial and regional governments.
Each new five-year plan is shaped by the country’s
most pressing challenges, taking into account prevailing economic conditions,
shifts in industry and technology, national security concerns, foreign trade
and diplomacy, and evolving demographic and social trends.
The 14th Five-Year Plan was developed against the
backdrop of the COVID-19 pandemic, which saw China’s GDP decline for the first
and only time in over four decades, and a protracted trade war with the US. A
major focus of the plan was therefore ways to bolster supply chain resilience,
boost domestic consumption, and shore up domestic technological and innovation
capabilities.
Other priorities set forth in the plan included
tackling carbon emissions and promoting green development, increasing
digitalization and developing digital technologies, upgrading traditional
industries, rural revitalization, and accelerating economic development in
China’s northern and western regions, among others.
What will be in China’s 15th Five-Year Plan?
As the 15th Five-Year Plan is still in the early stages of research and planning, we don’t know yet what will be in the final document. However, the government has provided some indicators of what the general policy direction will be through reporting on meetings between government officials.
Five years on from the start of the 14th Five-Year
Plan, China finds itself under very different conditions, while facing some
familiar and persistent headwinds. While the country has largely recovered from
the impact of the COVID-19 pandemic, the memory of some of the worst outcomes
of the pandemic, such as major economic and social disruption, supply chain
crises, and strain on domestic industries, will continue to shape economic
policy for many years to come.
Additionally, with Trump back in the White House,
China is once again in a tariff stand-off with its largest single trading
partner and chief economic rival, with the returning president reigniting the
trade war after taking office.
The 15th Five-Year Plan will be drafted with these
issues front of mind. Priorities are therefore likely to be centered around
improving economic resilience, which will include diversifying trade partners
and reducing reliance on imports for critical materials, boosting domestic
consumption, and improving domestic capabilities in key technologies.
During a symposium in April 2025 discussing the
15th Five-Year Plan period, Xi Jinping emphasized that, when planning economic
and social development for this period, “it is essential to proactively assess
how changes in the international landscape affect China and to adapt
accordingly by adjusting and optimizing the country’s economic structure”. He
highlighted several key areas of focus, including ensuring economic stability
by stabilizing employment, supporting enterprises, and continuing the high-level
opening up of China’s economy.
Bolstering technological innovation and scientific
research
In his speech at the April symposium, Xi placed
significant emphasis on scientific and technological development. He
specifically called for new quality productive forces to play a more prominent
role in the country’s economic upgrading and called for promoting the
transformation and upgrading of traditional industries, developing emerging
industries, and accelerating the construction of a modern industrial system.
He also highlighted the need for building a modern
industrial system and achieving breakthroughs in core and cutting-edge
technologies while strengthening basic research and improving original
innovation capabilities.
Meanwhile, a public input campaign launched by
Chinese state media in March 2025, which solicits feedback from citizens and
industry stakeholders, included “AI Plus” as a key topic for discussion. The AI
Plus initiative, first introduced in the 2024 Government Work Report, aims to
integrate AI across a wide range of industries to enhance automation, boost
productivity, reduce operational costs, and accelerate the digital
transformation of China’s economy.
Realizing this vision will require significant
investment in and development of multiple sectors, including technology
R&D, expansion of digital infrastructure such as data centers and
high-speed networks, and the advancement and mass production of hardware
components such as semiconductor chips and AI-optimized devices.
The 15th Five-Year Plan is anticipated to dedicate
significant space to the development of the AI Plus initiative and the
supporting industries and sectors, with policies promoting investment, fiscal
support, talent development, and public-private collaboration, among others.
Expanding domestic demand
Expanding domestic demand and boosting consumption
have been a considerable headache for the government for many years, but in
many ways, it is also key to ensuring the country’s future economic stability.
The need for China’s population to be able to buy a larger share of its fruits
of production is becoming more and more pronounced, both as key overseas export
markets, in particular the US and Europe, seek to reduce reliance on China, and
as China’s own production capabilities change through rising labor costs and a
shrinking working age population.
The 2025 Government Work Report released during the
Two Sessions called for making domestic demand the primary driver of economic
growth by addressing consumption weaknesses and integrating consumption with
investment.
As such, a variety of policies and measures to
boost domestic consumption and demand have been released over the years,
including consumption subsidies, trade-in schemes, expansion of key services,
and the development of new consumption in areas such as digital, green, and
smart products and services.
Despite this, consumption has been stubbornly low,
as evidenced by chronically low inflation and imports.
The 15th Five-Year Plan is likely to double down on
measures to boost domestic demand. Specific measures are likely to include
subsidies for the purchase of major goods, such as furniture, white goods, and
vehicles, as well as means to increase living standards and disposable income,
in particular for rural populations and the elderly, who currently have less
spending power but considerable potential as a consumer base. In the same vein,
we may also see efforts to improve income distribution and to boost wages for
middle and low-income groups.
Realigning the decarbonization strategy
The 14th Five-Year Plan set a range of
decarbonization targets, including targets for energy consumption reductions
that align with China’s overarching “dual carbon” goals – reaching peak carbon
emissions by 2030 and carbon neutrality by 2060.
Due to setbacks arising from the COVID-19 pandemic,
as well as a series of energy crunches and weather catastrophes in the
following years, China has fallen behind one of its key carbon targets for the
14th Five-Year Plan period – reducing carbon emissions per unit of GDP.
In the 2025 Government Work Report, China targeted
a decrease in the annual energy consumption per unit of GDP of about 3 percent
for 2025, slightly below the 2.5 percent decrease targeted for 2024. However, according to analysis from Carbon
Brief, this means China will miss its carbon intensity target – decreasing
energy consumption per unit of GDP by 13.5 percent from 2020 levels by 2025.
This means that this target will be recalibrated
for the 15th Five-Year Plan period, with considerations for China’s current
capabilities and the possibility of further external shocks. At the same time,
China is shifting one of its core decarbonization strategies from focusing on
the reduction of total energy consumption to the reduction of total carbon
emissions.
Under this change, China will move away from the
“dual energy consumption control” mechanism, in which the country aims to
control total energy consumption and energy intensity, to a “dual control of
carbon emissions” mechanism, which focuses on controlling total carbon
emissions and carbon emissions intensity.
In August 2024, the State Council released the
official plan for this transition, which will take place over the 15th
Five-Year plan period. This will require establishing a variety of monitoring
and assessment mechanisms, such as a carbon evaluation and assessment system,
carbon emission accounting systems, a product carbon footprint management
system, and product carbon labeling certification system, among others.
The 15th Five-Year Plan will therefore likely
provide more details and policies for achieving this transition to the new
control mechanism.
Finally, the end of the 15th Five-Year Plan will
also mark the deadline for China’s first major carbon emissions target –
reaching peak carbon emissions by 2030. Policymakers will therefore be setting
key targets for carbon emissions, renewable energy, and energy consumption in
order to prepare industries for carbon peaking and eventual carbon reduction
from 2030.
Rural revitalization
Rural revitalization is another policy that is
expected to feature prominently in China’s 15th Five-Year Plan. First
introduced as a key national agenda item in 2017, this long-standing policy
priority seeks to balance development disparities within the country by raising
income levels, improve living standards, and unleashing the economic potential
of China’s rural areas.
Over the years, rural revitalization has evolved
from targeted poverty alleviation into a more ambitious framework aimed at
fostering long-term prosperity and resilience. It has become essential not only
for improving rural livelihoods but also for ensuring national food security,
advancing the green transition, and expanding domestic consumption,
particularly at a time when external demand is softening and urban growth is
maturing.
As the population ages and migratory patterns
shift, the stability and modernization of rural areas are increasingly viewed
as critical to China’s social cohesion and future development.
The 15th Five-Year Plan is likely to
institutionalize recent efforts set out in the 2024–2027 Rural Comprehensive
Revitalization Plan released in January 2025. These include modernizing
agriculture through technological innovation, supporting the integration of
farming with processing and services, expanding infrastructure, promoting rural
to urban migration, and improving access to education, healthcare, and public
services for rural residents and migrant workers. Food security will also be a
major priority, supported by more efficient land use, gene-edited crop
varieties, and targeted subsidies.
When will we see China’s 15th Five-Year Plan?
The 15th Five-Year Plan is currently in the
drafting stage, with recommendations and input being gathered from experts,
industry associations, various government departments, and members of the
public.
We are likely to see formal recommendations for
what will be included in the final document following the plenum that will be
held in the fall of 2025. When drafting the 14th Five-Year Plan, the CPC
Central Committee released an official proposal for the drafting of the plan in
November 2020, a few months before the final document was adopted and released
in March 2021.
The final version of the 15th Five-Year Plan is
also expected to be released during the Two Sessions held in March 2026. The
plan will then officially be adopted and implemented.
(China Briefing is one of five regional Asia Briefing publications, supported by Dezan Shira & Associates. Dezan Shira & Associates assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Haikou, Zhongshan, Shenzhen, and Hong Kong. They also have offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Dubai (UAE) and partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh, and Australia.)
