Xin Ge: Finance as a strategic spine of China's 15th Five-Year Plan

Editor's Note: Xin Ge, a special commentator for CGTN, is a research fellow at the Institute of Public Policy and Governance, Shanghai University of Finance and Economics (SUFE), and a chair associate professor at the School of Public Administration and Policy, SUFE. The article reflects the author's opinions and not necessarily the views of CGTN.

The Fourth Plenary Session of the 20th Communist Party of China (CPC) Central Committee did more than set the tone for social and administrative development in the next five years; it sets the cadence for the economy. The session deliberated and adopted the Party leadership's Recommendations for Formulating the 15th Five-Year Plan (2026-2030), framing high-quality development, technological innovation, and national security as mutually reinforcing priorities. Finance is expected to do more than fund growth.

Days later, that mandate will be echoed by the 2025 Beijing Financial Street Forum, which opens on October 27 under the theme "Global Financial Development in an Era of Innovation, Transformation, and Restructuring." The forum emphasized building an innovation consensus, accelerating reform momentum, and jointly "reshaping" a more resilient and inclusive global system – an agenda aligned with the post-plenum direction.

Three priorities define the role finance is expected to play over the next five years. First, market infrastructure must evolve from credit provision to risk sharing and price discovery. The five-year plan's early guidance spotlights building a modernized industrial system and strengthening the real economy, and signals that capital markets, not only bank balance sheets, must finance long-cycle, high-variance innovation. That implies raising the share of direct financing, improving disclosure and enhancing governance so that intangible assets (IP, data, R&D capacity) can be credibly valued and collateralized.

Second, the financial system is tasked with enabling national strategy through targeted channels. Since the Central Financial Work Conference in October 2023, policymakers have identified "five major areas" – technology finance, green finance, inclusive finance, pension finance and digital finance – as the backbone of resource allocation. Follow-up guidance from the People's Bank of China this year reiterated implementation across these areas, underscoring that instruments and institutions – not just slogans – must mobilize patient, long-term capital toward climate transition, industrial upgrading, small-firm dynamism, demographic resilience and digital infrastructure.

Third, openness is shifting from "joining" to "shaping" – via rules, connectivity and market plumbing. Concrete steps in 2025 include Payment Connect, which links the Chinese Mainland's Internet Banking Payment System (IBPS) and Hong Kong's Faster Payment System (FPS) to provide real-time cross-boundary payments for residents and institutions. Hong Kong has also enhanced the offshore RMB repo market – supporting collateral rehypothecation and cross-currency repo and facilitating participation by northbound Bond Connect investors. These institutional upgrades expand RMB liquidity, deepen risk-management tools and reinforce Hong Kong's bridge role in two-way capital flows.

All of this rests on a non-negotiable foundation: financial stability. The plenum stressed the balance of development and security, the need for unified and comprehensive financial supervision, and early-warning mechanisms that identify and address vulnerabilities before they metastasize. In practice, that points to steady, rules-based resolution of risks in smaller financial institutions, local government financing vehicles, and segments of the property market, alongside credible tools to keep the RMB "generally stable at a reasonable and balanced level."

What does this mean in practice for the 15th Five-Year Plan? 

First, build deeper markets, not just bigger balance sheets. Raising the share of direct financing – equity, bonds and asset-backed instruments – will be essential to fund long-cycle, high-variance innovation. Elevating disclosure quality, enforcing investor protection and cultivating professional intermediaries are the fastest ways to improve the cost of capital for technology firms while reducing misallocation risk.

Second, scale "patient capital" matched to mission. Vehicles that can assume technology and commercialization risk – specialized venture funds, long-tenor bonds, revenue-sharing instruments and co-investment platforms with clear governance – will be essential. Pension finance and insurance should be mobilized to provide duration; inclusive and digital finance should widen access while preserving prudence through data-driven underwriting and appropriate sandboxed supervision.

Third, upgrade the openness toolkit. Connectivity is now about pipes and protocols. Extending Payment Connect usage, broadening eligible collateral and repo channels for offshore RMB, and expanding trade-settlement and liquidity backstops can internationalize the currency organically – through real transactions – rather than via headline liberalization alone. The 2025 upgrades in Hong Kong provide a workable template for incremental yet durable progress.

Fourth, keep policy ahead of the cycle. Regulatory unification, clear accountability and early-intervention toolkits should be advanced without creating credit cliffs. Stress testing, transparent data on local debt exposures and credible workout frameworks will help prevent localized problems from turning systemic while preserving room for counter-cyclical policy if needed.

The political economy backdrop matters. As Beijing moves toward publishing the 15th Five-Year Plan in 2026, the leadership has explicitly linked high-quality development to technological self-reliance and stronger institutions – finance included. The Fourth Plenum adopted the recommendations that will shape the plan, while the Financial Street Forum provides a venue for translating them into operational consensus. The next five years will test whether institution-building can match ambition: whether markets price risk transparently, capital flows reliably to frontier projects, opening enhances resilience rather than fragility and stability tools intervene early instead of late. If these conditions hold, finance can credibly serve as a crucial strategic spine of China's modernization drive in 2026–2030.