Editor's note: The recommendations for the 15th Five-Year Plan have been released, outlining priorities for national economic and social development. CGTN invites industry insiders and experts to interpret the policy implications in science and technology, ecological civilization and ecosystem conservation – key engines of China's high-quality development. Robin Xing, chief China economist at Morgan Stanley, and Cai Zhipeng, economist at Morgan Stanley, explain how China's 15th Five-Year Plan centers on boosting technology and emerging sectors for future growth. The article reflects the author's opinions and not necessarily the views of CGTN.

The recommendations for the 15th Five-Year Plan (2026-2030), released on October 28, 2025, by the 20th Central Committee of the Communist Party of China (CPC) after concluding its fourth plenary session in Beijing, identify "substantial improvements in scientific and technological self-reliance and strength" as a major objective.

China's five-year plans serve as important roadmaps for economic, social and policy priorities. They guide capital allocation, subsidies and reform agendas, directly influencing economic growth.

Recent five-year plans reflect a clear transition from rapid, extensive industrialization toward high-quality, resilient and technology-driven growth. The forthcoming 15th Five-Year Plan is expected to deepen this shift by emphasizing ecosystem-based strategies, AI-as-infrastructure and prudent local industrial budgets aimed at enhancing productivity rather than simply expanding scale.

This evolution responds to diminishing investment returns, demographic headwinds and rising global uncertainty. While policy continuity will remain a hallmark, strategic recalibration will keep technological self-reliance and economic security at the core.

Pushing the frontier – supercharged by AI

China is poised to accelerate innovation by prioritizing strategic emerging industries and tackling supply-chain chokepoints. We expect the 15th Five-Year Plan to spotlight sectors such as AI, semiconductors, green energy, advanced manufacturing and biotech. Beijing may also deploy a "new type of national system" to resolve persistent bottlenecks in advanced semiconductors, high-end components and critical materials. This approach not only mitigates geopolitical risk but also fosters the recombination of foundational ("what") and applied ("how") knowledge, driving sustainable innovation.

Equally important will be the broad application of AI across manufacturing, logistics, healthcare and consumer services. China's distinctive AI ecosystem – anchored by super apps and rapid adoption of AI-native solutions – positions the economy to unlock efficiency gains and offset demographic headwinds.

Building on a solid foundation: Past achievements pave the way

China's industrialization has been shaped by market-oriented reforms, global integration, and – most importantly – a pragmatic approach characterized by continuous local adaptation and experimentation. Industrial policies have played a pivotal role in accelerating technological progress, particularly by emphasizing what economic historian Joel Mokyr terms "prescriptive knowledge" – the practical how of doing things.

China has excelled at acquiring and applying this know-how through openness, technology transfer and targeted R&D in applied sectors. This strategy enabled rapid advancement during the catch-up phase, helping China narrow gaps with global leaders. Furthermore, economies of scale, a comprehensive supply chain and a deep talent pool have laid a strong foundation for the rise of emerging industries.

Rising competitiveness in high-end manufacturing

China remains the world's largest manufacturer, contributing roughly 30 percent of global manufacturing value added. Its manufacturing base has evolved from low-cost, labor-intensive production to a global leader in high-value sectors such as electric vehicles (EVs), batteries and robotics. In 2023, China accounted for 46 percent of global EV sales, with companies like CATL and BYD emerging as dominant players in battery technology and production.

Government policies – ranging from subsidies and tax incentives to R&D grants – have accelerated the growth of new energy vehicles, smart manufacturing and industrial automation. Today, China represents more than half of global demand for industrial-robot installations and is rapidly localizing production of critical components, including high-end hydraulics, sensors and reducers.

Rapid ascent in emerging sectors

China's technology sector is advancing rapidly in AI, robotics and biotech. Despite U.S. export controls on advanced chips, China has built a resilient AI ecosystem anchored in algorithmic efficiency, open-source models and application-driven innovation. The emergence of models like DeepSeek underscores China's ability to deliver high-performance, cost-effective AI solutions for broad adoption.

In robotics, China is not only the world's largest market for industrial robots but is also evolving into a global innovation hub for next-generation robotics, including humanoids – on track to account for roughly 30 percent of global humanoid robot stock by 2050.

Meanwhile, China's biotech industry is approaching a breakthrough phase. The country has rapidly narrowed the innovation gap with global leaders in areas such as antibody-drug conjugates and bi/multi-specific antibodies. By 2040, China-originated assets could represent 35 percent of U.S. FDA approvals, up from just 5 percent today.

AI-driven industrial upgrades

Recent five-year plans have consistently combined the promotion of strategically emerging industries with the upgrading of traditional sectors – initially targeting legacy industries and later expanding to high-end manufacturing. The next chapter will center on AI as a transformative force across China's industrial landscape.

The emphasis is on applying AI throughout the "real economy," spanning manufacturing, logistics, healthcare and consumer services. The proliferation of super apps, rapid adoption of AI-native applications, and integration of AI into industrial operations are driving productivity gains and enabling new business models. The data center industry – supported by abundant green energy and significant investment – is positioned to power the next wave of AI and digital transformation.