China Touts Domestic Drivers for New 5-Year Plan
As China begins its 15th Five-Year Plan (2026-2030), official reports are emphasizing the role of "powerful domestic growth drivers" for a strong start. The narrative focuses on internal economic resilience as the foundation for achieving its long-term goals.
The just-concluded 14th Five-Year Plan (2021-2025) saw China's GDP surpass 140 trillion yuan, with an average annual growth of 5.4%. In 2025 alone, the economy expanded by 5.0%, meeting the official target. Despite this growth, a key challenge has been sluggish domestic demand. In 2025, final consumption only contributed 52% to GDP growth, and retail sales grew by a modest 3.7%. This reflects a cautious consumer environment, with the household debt-to-GDP ratio falling to 59.4% as households prioritized deleveraging. Technological self-reliance is a cornerstone of the new plan, with a goal to increase total R&D expenditure to over 3.2% of GDP. This initiative will focus on achieving breakthroughs in critical areas like integrated circuits, foundational software, and biomanufacturing. The previous plan already saw significant digital progress, with China's total computing power now ranking second globally and the country holding 60% of the world's AI patents. The 15th Plan aims to build on this by fully deploying 6G and integrated satellite-terrestrial networks. Green development remains a high priority, with China committed to peaking carbon emissions before 2030. In 2025, clean energy technologies, such as solar and electric vehicles, drove over a third of China's economic growth, attracting investments of $1.0 trillion. The new plan will expand on this by moving from dual controls on energy consumption to dual controls on carbon emissions. It also aims to expand the national carbon market to cover more industries and promote the large-scale application of green hydrogen and sustainable aviation fuel. To further stimulate the domestic market, the plan will accelerate the development of a modern industrial system. This includes the high-end, intelligent, and green transformation of manufacturing, with a focus on expanding strategic emerging industries like AI, new energy, and aerospace.
