At a glance: The Central Committee of the Chinese Communist Party (CCP) concluded four days of closed-door plenary meetings during which it discussed and adopted draft proposals for the formulation of the 14th Five-Year Plan (FYP) – China’s national blueprint for economic and social development from 2021 to 2025. The closing communiqué indicated twelve high-level policy priorities for the coming five years. These include:
Upholding the central role of innovation in China’s modernization drive
Accelerating the development of a modern industrial system including strategic emerging industries
Forming a strong domestic market and promoting the dual circulation strategy (双循环)
The communiqué also announced a series of “long-range objectives” for 2035. China is, for instance, to build a modernized economy with per capita GDP at the level of “moderately developed countries” within the next 15 years. Other objectives include significantly increasing China’s economic and technological strength, achieving major breakthroughs in core technologies, and becoming a globally leading nation in innovation.
MERICS comment: Given China’s persistent high-tech development and self-sufficiency drive, it comes as no surprise that innovation featured prominently on the CCP’s list of development priorities. However, it is the first time that a five-year plan will position science and technology independence and self-reliance (科技自立自强) as a “strategic pillar” for national development. This is a strong indicator that China’s tech and industrial policy will stay the course, even amid – or precisely because of – tensions with the US. The inclusion of other buzzwords in the high-level communiqué, such as China’s ambitions to become a manufacturing, cyber and transportation “superpower” with an advanced industrial base, further confirms that China’s leadership is going to continue pursuing its tech-driven industrial upgrading goals.
The communiqué itself did not specify technology areas that will receive priority treatment. The Central Committee’s formal proposal for the formulation of the 14th FYP - published only today – offers slightly more detail. Taken together with extensive signaling in the weeks leading up to the plenum, this indicates that key emerging technologies and ‘new infrastructure’ such as advanced semiconductors, new energy vehicles, 5G and artificial intelligence are slated for special policy support. Quantum technology was already announced as one of the new high-tech areas to feature in the 14th FYP following remarks by Xi Jinping highlighting its importance. It will be interesting to see whether the likely increase in policy support for China-made semiconductors will address concerns voiced recently by regulators about the excessive resource waste that has resulted from companies’ race to become China’s next chip champion.
Policy name: Communiqué of the Fifth Plenary Session of the 19th Central Committee of the CCP (中国共产党第十九届中央委员会第五次全体会议公报) (Link)
Issuing body: CCP Central Committee
Date: October 29, 2020
Explainer: China’s 14th five-year planning process
The plenum communiqué published by the Central Committee only provides a high-level overview of the initial cornerstone priorities of the 14th FYP. More details were announced in the slightly more detailed planning document published on November 3, titled the “Proposals for the Formulation of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035”
(关于制定国民经济和社会发展第十四个五年规划和二〇三五年远景目标的建议). However, the complete 14th FYP document with numerical targets and policy details is only set to be publicly released after its formal approval by the National People’s Congress in March 2021. Subsequently, local governments and individual ministries will issue their own regional-, sector- and issue-specific FYPs, which contain action plans for policy implementation. One particularly interesting plan to watch will be the FYP for national science and tech innovation. The Ministry of Science and Technology (MOST) has recently called for research contributions
on major issues that should inform the plan. This suggests that additional policy support for domestic innovation is in the cards.