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China has just released its latest draft five-year plan, which will be approved at the next plenary session of the National People’s Congress from March 5 to 12, 2026. The document sets out the plans and policies that the central government will implement over the next five years (2026 to 2030). The draft shows how Beijing intends to respond to the ongoing trade war and technology competition with Washington. according to Nikkei Asiathe government is concerned about continued instability in international relations and is taking steps to insulate itself from such effects. The document states, “The international balance of power is undergoing profound adjustments, geopolitical conflicts are becoming more frequent and widespread, global governance deficits are expanding, and security issues are becoming more prominent.”
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Some of the key policies set out in the draft five-year plan include establishing a more robust “response mechanism” to enhance supply chain security and enhance “rare earth competitive advantage”. This is the biggest problem China has encountered so far in its pursuit of technological superiority. The United States has been imposing export controls on several key technologies it needs, such as the latest artificial intelligence chips from Nvidia and AMD, and the ASML lithography machines that chipmakers need to make the most advanced semiconductors. On the other hand, Beijing now requires export licenses for rare earth materials, making it harder for technology companies and semiconductor manufacturers to obtain these minerals, which are crucial for making the most high-end chips.
Beyond supply chain issues, Beijing has pledged to prioritize research and development, with a five-year plan calling for an annual increase in domestic innovation investment of 7% or more. While this may seem like an ambitious target, it actually continues the targets set in the last five-year plan and looks to be paying dividends for the country. In addition to this, it added that “extraordinary measures” will be taken in several key areas such as semiconductors, industrial machinery and advanced materials. It also mentioned promoting the development of humanoid artificial intelligence robots, focusing on the integration of “brain and brain”, as well as the establishment of hundreds of vocational schools to train Chinese citizens in strategic industries such as artificial intelligence.
The policies show what Beijing plans to prioritize over the next five years, especially in terms of technology. As competition between China and the United States heats up, the Chinese government knows it must continue to take steps to decouple from Washington and gain independence, especially in technology – we can see how it plans to achieve this by 2030 in the 15th Five-Year Plan.
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