CCP’s New 5-Year Plan Outlines Wartime Economy: Analysts

Beijing’s recently announced five-year plan is an attempt to put the economy on a war footing, according to some China analysts, who say the communist regime is preparing for a prolonged technological blockade or conflict with the United States. However, other China-watchers suggest that the plan is merely a continuation of previous strategies.

Five-year plans are a signature tool of planned economies used by the former Soviet Union and other socialist states, including communist China, where the latest plan was laid out at the end of the Chinese Communist Party’s top political meeting, known as the Fourth Plenum.

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Chinese state media outlets released the official communiqué of the Fourth Plenum on Oct. 24, outlining the regime’s priorities for 2026 to 2030—the country’s 15th five-year plan. The plan aims to “build a modernized industrial system and reinforce the foundations of the real economy” and to “achieve greater self-reliance and strength in science and technology.” These goals are followed by “expanding domestic demand” and “improving living standards,” according to the communiqué.

Industrial modernization and technological independence have been the keys for the Chinese regime to strengthen its position in its competition with the United States.

The plans demonstrate that the Chinese Communist Party (CCP) “is making structural adjustments to prepare for a future Sino–U.S. tech war or a prolonged technological blockade,” according to Sun Kuo-hsiang, a professor of international affairs and business at Nanhua University in Taiwan.

“Internally, it prioritizes the real economy and technological self-reliance as the material foundation for national security. Externally, it aims to counter Western supply chain blockades through domestic demand and independent innovation,” he told The Epoch Times.

The communiqué on the plans repeatedly mentioned “high-quality development” for the economic goals in the five-year plan outline but didn’t specify economic growth targets. China’s economy has been sluggish since the CCP enforced its draconian total lockdown policies during the COVID-19 pandemic.

Official data released on Oct. 20 reported that China’s economy officially grew by 4.8 percent year-over-year in the third quarter, lower than the 5.2 percent in the second quarter and the lowest growth rate since the same period last year. However, many international economists do not believe that the CCP’s data is accurate.

Although the CCP pledged to increase efforts on “improving living standards while increasing consumer spending” in the communiqué, it did not detail how these goals would be achieved or how they would be funded.

In terms of national security and foreign policy, the communiqué reiterated the CCP’s goals of “modernizing national defense and the armed forces” and “pursuing major-country diplomacy” while emphasizing “boosting combat preparedness.”

As always, it paid tribute to the communist theory of class struggle between the oppressors and the oppressed, outlining the need for party members to “demonstrate the courage and competence to carry forward our struggle, and dare to brave high winds, choppy waters, and even dangerous storms.”

The CCP’s complete 15th Five-Year Plan will be announced at the National People’s Congress in March 2026.

Wartime Economic Order

The order of priorities outlined in the CCP’s 15th Five-Year Plan is essentially “a wartime economic order,” Sun told The Epoch Times.

Putting “scientific and technological self-reliance” above expanding domestic demand reveals that the CCP has already regarded science and technology as a security issue rather than an economic issue, he said.

“Science and technology are no longer a free activity of innovation but have been incorporated into the national security system to be managed by the state,” Sun said.

“This plan emphasizes state control over market guidance.”

The decline of China’s middle class after the COVID-19 pandemic has led to weak domestic consumption, which is the biggest concern for the Chinese economy at present, Wang He, a U.S.-based China affairs observer, told The Epoch Times.

“But the five-year plan is still centered on industrial development. This is not based on economic considerations but a strategic and political consideration, particularly focused on war,” he said.

China’s manufacturing industry is already at severe overcapacity, Wang noted, but the CCP is still emphasizing industry.

“If a war breaks out between China and the United States, such as a naval conflict, China’s shipbuilding capacity is 100 times that of the United States. The CCP’s weapons and military industry boasts more than twice the capacity of the United States,” he said. “The CCP’s political considerations outweigh economic ones, leading to a serious distortion in China’s economic policies and investments, deviating from the normal economic trajectory.”

Flaws in the 5-Year Plan

China’s manufacturing represents about 27 percent of the country’s gross domestic product. Manufacturing exports make up more than 90 percent of China’s total exports.

“China’s manufacturing industry is highly dependent on the international market,” Wang said.

“But in the context of the CCP’s wolf warrior diplomacy, with China as a ‘major country,’ confrontation with the West will inevitably lead to economic decoupling, which is the most fatal flaw of its 15th Five-Year Plan.”

Sino–U.S. trade tensions have been escalating from more covert to overt means. The CCP announced on Oct. 9 that it would expand export controls on rare earth-related products, and the Trump administration responded on Oct. 10 by imposing an additional 100 percent tariff on imported Chinese goods. On Oct. 20, U.S. President Donald Trump issued a stern warning, saying that if China fails to reach a trade agreement with the United States, the total U.S. tariffs on Chinese goods would rise to 155 percent starting on Nov. 1.

With insufficient domestic demand, China’s huge production capacity relies on demand in the international market to support its industry, according to Wang.

To compete with the United States, “China must establish its own independent industrial system and its own independent scientific and technological industrial system,” he said.

However, without close scientific, technological, and educational exchange with the outside world, “it is impossible for China to develop science and technology on its own,” according to Wang.

There’s nothing much new in the communiqué, and overall, China’s current internal political challenges, including power struggles and personnel changes within the Party, remain a focus, Wu Se-Chih, a researcher at Cross-Strait Policy Association in Taiwan, told The Epoch Times.

The new five-year plan outline reflects the CCP’s current major concerns related to the economy, Wu said.

“The CCP is focused on the progress of macroeconomic policies and addressing local issues from a top-down perspective from the central government,” he said. “And the local issues, of course, are the risks of the huge local government debt.”

Wu said that amid the predicament of China’s overall economic development, “the main focus is on stabilizing employment, which is tied up with domestic consumption.”

“An unemployment issue would lead to social unrest.”

Luo Ya and Li Jing contributed to this report.