Beijing’s New Five-Year Plan: More of the Same

Commentary

For China’s Communist Party, each new five-year plan is supposed to revise the direction of the economy. The recently announced version—the 15th of its kind—claims to have done that. Of course, like all past plans, it is mostly aspirational, certainly not operational. It states where Beijing wants to take the economy, not how it intends to get it there.

This latest plan does not even have much new in it. Unsurprisingly, it emphasizes much the same goals and policies that Chinese leader Xi Jinping has been pushing for years now.

The plan—details and the usual Party language aside—stresses four broad aims: One is to continue the by now year-long effort to upgrade China’s technology, including strides in artificial intelligence (AI), presumably to overtake the United States. Two is a constant refrain throughout the plan, calling for compliance and state control. Three, it stresses Beijing’s already apparent desire to internationalize China’s stature diplomatically, commercially, and financially, including, perhaps especially, the global stature of China’s digital yuan, presumably to overtake the U.S. dollar’s role as the world’s international currency, what bankers and economists refer to as the “global reserve.” Finally, all objectives are framed in terms of national security, a long-standing obsession of Xi’s leadership.

The technology push in the plan is, in every respect, an extension of what Beijing has been doing since at least 2022. This technology emphasis over the past few years runs counter to the 13th and 14th five-year plans, both of which emphasized heavy manufacturing and integrating China’s economy into global supply chains.

This latest plan mentions these former emphases but otherwise lines up with these recent policies, emphasizing upgrades to China’s technologies, especially AI, quantum computing, sophisticated semiconductors, IT services, software, electric vehicles, and biomedical advances. To this end, this new five-year plan encourages Chinese companies—both state-owned and private—to invest overseas, presumably to learn best practices, especially the commercialization of innovations that might advance the goal of accelerating domestic demand growth.

The plan’s emphasis on control should hardly come as a surprise to anyone who has observed China under Xi. Throughout, this planning document stresses Beijing’s oversight and the need for enterprises, especially those investing overseas, to comply earnestly with all regulations. The plan emphasizes the need to invest in mechanisms and institutions to safeguard assets and intellectual capital, especially when investing overseas. Referring to such structures as “service networks,” the plan calls for China to enhance areas such as legal services, accounting, auditing, credit rating, arbitration, and the mediation of disputes.

The push to raise China’s stature globally is also evident. The planners talk about the promotion of “the overseas application of Chinese standards” when referring to technological and industrial practices as well as regulatory structures. In this effort, Beijing’s planners have given Hong Kong a prominent role. Some 60 percent of Chinese investment outside the mainland already goes to Hong Kong, and that preference—almost 20 times the amount aimed at the United States—remains clear in this new plan.

Beijing wants Hong Kong to become a global hub for investment, banking, and asset management, as well as legal applications and dispute resolution. As part of this effort, the plan makes clear that Beijing also wants to promote the digital yuan as an international currency and global store of value.

None of this neglects Beijing’s continuing emphasis on its Belt and Road Initiative (BRI). The new five-year plan makes clear that the initiative will remain central to Beijing’s investment outreach to the rest of the world. In this area, however, there is hardly any emphasis on technology, legal, or financial services. For BRI infrastructure development, especially transportation, remains dominant, as most BRI participants have less developed economies. But even here, the plan places a greater emphasis than in the past on “high quality” projects better aligned with China’s objectives and “the strategies of participating countries.”

If much of this new plan differs from its predecessors, very little of it differs from what Beijing has been trying to do, more or less continually, since the pandemic and Beijing’s ill-fated zero-COVID policies ended in 2022. It is a pattern that should be familiar to China watchers and readers of this column.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.