China's Leader Signals Commitment to Competing with the West in Manufacturing and Technology

China's leader, Xi Jinping, has outlined the country's next five-year plan, signaling a continued commitment to competing with the West in advanced manufacturing and technology. The plan, which covers 2026-2030, emphasizes the importance of securing a global lead in key technologies, including semiconductors, high-end equipment, and advanced materials. Despite tensions with Washington over trade and technology, Mr. Xi remains focused on building a strong industrial and technological base to drive economic growth and improve the standard of living for China's citizens.

Key Takeaways:

• China's next five-year plan prioritizes the development of advanced manufacturing and technology, with a focus on breakthroughs in key technologies such as semiconductors, high-end equipment, and advanced materials.
• The plan aims to double down on industrial and technological strength, despite concerns from trading partners that China's expanding exports are undercutting their own industries.
• China's strategy for expanding domestic consumption differs from the approach supported by some Western economists, which emphasizes the importance of spending on health care and other welfare outlays to boost consumer confidence and spending.
• The plan outlines the Chinese government's intention to improve export control and security review mechanisms and enhance the exploration, development, and creation of reserves of strategic mineral resources.
• The Chinese leader's vision of national strength in the face of global competition remains focused on manufacturing and innovation, which he believes will bring more prosperity to the country's people.

Statistics:

• China's next five-year plan covers the period from 2026 to 2030.
• The plan aims to pursue breakthroughs in key technologies, including semiconductors, high-end equipment, and advanced materials.
• The Chinese government will adopt "extraordinary measures" to force breakthroughs in choke-point technologies, according to Gerard DiPippo, an associate director of the RAND China Research Center.
• China will do more to expand domestic consumption, with a "marked increase" in household spending and a "sustained strengthening of domestic demand as a primary driver of economic growth."
• The plan notes that China will "improve export control and security review mechanisms" and "enhance the exploration, development, and creation of reserves of strategic mineral resources."

Sources:

• China's next five-year plan, approved by officials at the party's Central Committee, as reported by The New York Times.
• Gerard DiPippo's analysis of the plan, as quoted by The New York Times.
• A statement by China's leader, Xi Jinping, to the party's Central Committee, as reported by The New York Times.