Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinion and not necessarily the views of CGTN.

The final year of China's 14th Five-Year Plan (2021-2025) has witnessed the nation's economic performance continuously defying global trends and exceeding expectations. Against a backdrop of sluggish recovery in advanced economies and persistent geopolitical tensions, China has maintained its position as the primary stabilizer of global growth.

This remarkable resilience stems not from temporary factors but from deep-seated institutional advantages that have been systematically cultivated and refined over decades of reform and opening up. These structural strengths – encompassing governance capacity, innovation ecosystems and developmental flexibility – have not only ensured the successful implementation of current development goals but also established a comprehensive framework for the forthcoming 15th Five-Year Plan (2026-2030).

Strategic governance: The bedrock of macroeconomic stability

China's economic governance model has demonstrated unparalleled effectiveness in maintaining stability amid global turbulence. Unlike Western economies, which have oscillated between extreme monetary policies – from quantitative easing to aggressive rate hikes – China has maintained a balanced, forward-looking approach to macroeconomic management. The country's ability to coordinate fiscal and monetary policies with industrial and social policies has created a synergistic effect that buffers against external shocks.

The strength of China's governance is particularly evident in three critical areas. First, the nation's strategic reserve system for key commodities and industrial materials ensures supply chain security regardless of international market fluctuations. Second, the multi-layered risk prevention mechanism in the financial sector has successfully contained potential systemic risks. Third, the adaptive regulatory framework for emerging industries allows for both innovation facilitation and necessary oversight.

This governance capacity was severely tested during recent global crises, from pandemic disruptions to energy market volatilities. Each time, China emerged with its growth fundamentals intact. The country's economic planners have mastered the art of making preemptive adjustments rather than reactive corrections, allowing for smoother transitions during policy shifts. This forward-looking approach to economic management represents a distinct advantage that many economies find challenging to replicate.

Innovation ecosystems: Powering the next phase of growth

China's transformation into a global innovation powerhouse represents one of the most significant economic developments of the 21st century. What began as a strategy to catch up technologically has evolved into a comprehensive innovation ecosystem that now leads in several frontier fields worldwide. The nation's approach to technological advancement combines scale, speed and strategic focus in ways that are reshaping global competition patterns.

At the heart of this success lies a unique public-private partnership model that aligns national research priorities with market dynamics. State-sponsored mega-projects in quantum computing and artificial intelligence provide the foundational research, while agile private enterprises commercialize applications at an unprecedented speed. The rapid development of China's semiconductor industry despite external constraints stands as testament to this model's effectiveness.

Regional innovation clusters have become particularly noteworthy. The Beijing-Tianjin-Hebei research corridor, the Yangtze River Delta's advanced manufacturing hub, and the Guangdong-Hong Kong-Macao Greater Bay Area's digital economy ecosystem each specialize in different aspects of technological advancement while maintaining strong interconnections. This decentralized yet coordinated approach prevents bottlenecks while encouraging healthy competition among regions.

The human capital dimension completes this innovation equation. China's massive investment in STEM education – a combination of science, technology, engineering, and mathematics – has created the world's largest pool of engineering talent. Meanwhile, programs like the Thousand Talents Plan have successfully attracted global expertise – this combination of homegrown and international talent forms the backbone of China's technological ascent.

Sustainable transition: Redefining development paradigms

China's commitment to green development represents more than ecological efforts – it constitutes a fundamental reimagining of economic growth models. The nation's dual carbon goals – achieving a carbon peak by 2030 and carbon neutrality by 2060 – have catalyzed a whole-economy transformation that simultaneously addresses climate challenges and creates new competitive advantages.

The scale of China's renewable energy deployment is rewriting global energy maps. The nation's leadership in solar photovoltaic and wind turbine manufacturing has driven down costs worldwide, making clean energy more accessible globally. More significantly, China is pioneering the integration of massive renewable capacity into national grids through smart technologies and storage solutions.

The circular economy model being implemented across Chinese industries represents another leap forward. By designing production processes that minimize waste and maximize resource efficiency, manufacturers can achieve both environmental and economic benefits. The electrification of transportation, led by China's dominant electric vehicle industry, illustrates how environmental objectives can align with industrial leadership.

Perhaps the most innovative is China's principles of ecological civilization, which incorporates environmental indicators into local governance evaluations. This systemic approach ensures that sustainability isn't treated as an add-on but as an integral component of development planning. The resulting policy coherence across different levels of government provides a model for comprehensive environmental governance.

As China prepares to embark on its 15th Five-Year Plan, the nation's institutional advantages position it uniquely to navigate the complex challenges ahead. The coming years will likely see these strengths being leveraged in several key directions: further digitalization of traditional industries, deeper integration of green technology, and more sophisticated engagement with the global economy.

What makes China's institutional model particularly effective is its adaptive nature. The system demonstrates remarkable learning capacity, continuously incorporating successful experiments from special economic zones or pilot programs into national policy frameworks. This bottom-up learning, combined with top-down coordination, creates a dynamic governance model that evolves in response to changing circumstances.

Ultimately, China's institutional strengths represent more than just economic tools – they embody a comprehensive development philosophy that balances immediate needs with long-term objectives, national priorities with global responsibilities, and economic growth with social and environmental well-being. As the nation transitions to its next development phase, these institutional advantages will remain its most reliable compass for navigating an increasingly complex world.

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