The Central Committee of the Chinese Communist Party’s recommendations for the 15th five year plan—covering 2026 to 2030—were adopted at the fourth plenum held in October. The plan will be reviewed and approved at the March 2026 session of the National People’s Congress.

These recommendations demonstrate developments in China’s approach to economic and foreign policy while maintaining previous plans’ overall goals, objectives and priorities.

The proposal shows maturing approaches to political and economic reforms, with a focus on improving legal and regulatory systems and on the efficient growth of sectors such as infrastructure and agriculture. There are equally significant shifts in international relations and foreign policy, reflecting China’s challenging external environment.

The period has been called critical for achieving ‘basic socialist modernisation’ yet the plan recognises the significant risks caused by a complex international environment and geopolitical competition. The plan will abide by six principles: upholding the party’s overall leadership; putting people first; ensuring high quality development; upholding comprehensive and in-depth reform; implementing state market balance to form an economic order that is ‘flexible’ and ‘well managed’; and balancing security and development.

The proposal reflects the struggle and failure in addressing several enduring structural problems including local government debt, problems in the real estate market, stagnant rural development, low domestic consumption and falling birth rates. The central leadership’s frustration with previous efforts is possibly reflected in the elevation of some of these issues to the level of national security priorities and in new policy directions.

The proposal shows that the forthcoming plan also grapples with the persistent dilemma of balancing state control and market development. Common prosperity—a 2021 goal to achieve more equitable distribution of wealth—has been de-emphasised in the plan’s guiding principles, while an additional point to create a ‘world class business environment which is flexible yet well managed by a capable government’ has been added.

Scientific innovation and industrial modernisation remain focus areas

This plan’s foremost priority is to build a modern industrial system. This entails upgrading traditional industries such as mining and machinery-making through technological and green upgrades, organisational reform and internationalisation. Quantum technology, biomanufacturing, hydrogen energy, nuclear fusion, brain-computer interface and 6G are identified as future and new economic drivers.

Self-reliance in science and technology is also among the plan’s top priorities. The proposal aims for original innovation in core and new technologies to lead to new industrial transformation and digitalisation. It also aims at bolstering research and development by improving school and university education, encouraging talent immigration and deepening small and medium enterprises’ role in innovation. Notably, the central government’s science and technology system was restructured and centralised in 2023 with the formation of a Central Science and Technology Commission headed by Politburo member Ding Xuexiang. Key additions addressing ecological protection and green development include developing a new energy system; reliable and orderly replacement of fossil fuel energy; smart grids; micro grids; improving energy storage capacity; and greening of transportation and industry.

While state control in the private sector has increased in past years, this plan may indicate a step back. For instance, it discusses implementing legislation to promote the private sector and strengthen property rights, judicial supervision and equal access to land. It also calls for improvements to regulation covering mergers and acquisitions, and bankruptcy. ‘High level opening and win-win cooperation’ have been moved higher up in the list of priorities. There is also a new focus on the service sector, including calls to improve cross border trade in services. This may help countries such as India to correct their trade imbalance with China. In response to declining foreign reinvestment, the proposal calls for a predictable institutional environment; equal treatment of foreigners and locals; and secure international data flows.

However, since some such promises were also made in the previous plan, their effective implementation remains to be seen.

Policy tweaks bolster domestic consumption and public confidence

A major goal in this plan will be to construct a unified national market with increased property rights protection and market access. In a shift from ‘tournament style competition’, which was credited for various provinces’ economic growth in the past, the central government now seeks to rectify local protectionism, market segmentation and excessive, self-defeating competition between provinces and companies.

While the 14th plan focused on supply side measures such as reducing transaction costs to boost the economy, this time there is an emphasis on the long-standing yet unresolved goal of increasing domestic consumption. Suggested measures include increasing employment; raising incomes; increasing government expenditure on public services; implementing inclusive policies to ensure government funds directly reach consumers; and removing restrictions on the purchase of houses and cars.

In the section on livelihood and common prosperity, three points stand out: the inclusion of development of high-quality real estate and housing; increasing childbirth by providing subsidies, tax benefits, maternity insurance, a leave system and childcare services; and the exclusion of social governance, which has been moved to the section on national security. The first two have caused public discontent: the real estate sector crashed after the government’s 2020 ‘three red lines’ policy that aimed to curb excessive debt in the property sector; and the push for higher births has come without an adequate rise in family incomes and maternity support for working women.

In an important fiscal policy shift, this proposal discusses increasing the central government’s proportion of local expenditure, beyond the usual talk of tax reforms and specification of the division of local expenditure between the central and local governments. Since tax reforms in 1994, local governments have traditionally shouldered the bulk of expenditures, while revenues have flowed to the central government. This has resulted in rising local debt and a heavy reliance on land sales and transfers from the central government. In that context, increasing central government expenditure aligns with the identification of real estate and local government debt as systemic risks to national security that need orderly resolution.

Governance: More local, but with AI characteristics

A notable change with regards to rural revitalisation—which covers farmers’ livelihoods, agriculture and rural areas—is an emphasis on county-level governance in infrastructure, land management, economies and poverty alleviation policies.

Public safety governance has been prioritised, including calls for pre-emptive prevention, beefing up of mass prevention and control forces, and standardised construction of comprehensive governance centres. This is to be supplemented with ‘socialist social governance with Chinese characteristics’ which includes enhancing party building in grassroots social and economic organisations and increasing the role of citizens’ covenants and village rules and regulations.

When it comes to the culture industry, there is greater focus on adapting to digital advancements, particularly in guiding and regulating public opinion, and the management of online content.

International outlook negative, but an opportunity for China

The recommendations call for greater strategic alignment between countries participating in the Belt and Road Initiative. It specifically names two projects—the China-Europe (Asia) Freight Trains and the Western Land-Sea New Corridor—indicating China’s strategic focus areas. The initiative is rationalised through calls for ‘small but beautiful livelihood projects’; sustainability; risk controllable investment; and protection of China’s overseas interests.

The recommendations also highlight soft power and influence over international discourse, calling for enhanced regional and country-specific research to facilitate effective international communication.

The section on China’s national security system has several striking additions, including building an overseas security guarantee system, combatting sanctions and foreign interference, and implementing ‘long arm jurisdiction’.

While economic, food, energy and minerals security are all recognised as important, political security—meaning regime security—comes first. The proposal also calls for boosting capabilities in emerging fields including cyberspace, data, AI, ecology, outer space, and deep sea and polar regions.

The section on the armed forces and national defence is longer and has a new emphasis on the development of advanced combat capabilities and the application of AI to military systems. Amid turmoil and corruption scandals, the proposal also calls for a modernisation of military governance and a deepening of ‘political rectification’ within the armed forces. Finally, it focuses on coordination between the civilian and military sectors, and the integration of new productive forces and scientific advancements with new combat capabilities.

On international relations, the recommendations support the rule of law and calls for legal and administrative reforms. This includes construction of mechanisms for international commercial mediation, arbitration and litigation.

On Taiwan, there appears to have been a shift in official parlance from ‘1992 consensus’ to the ‘Party’s overall strategy for resolving the Taiwan issue in the new era’. There is tonal shift as well, more assertively opposing ‘independence and external interference’. Further, building ‘a shared community with neighbouring countries’ and developing common security and trust seem to have a priority over great-power relations. China seeks a greater role in the provision of global public goods and foreign aid and wants to assist the Global South to unite. With major powers, instead of coordination and cooperation, the goal is to maintain overall stability.

Finally, a new type of international order is to be built based on the implementation of Chinese global initiatives on development, security, civilisation and governance. Curiously, there is no mention of ‘upholding the international system with United Nations at its core’, a standard phrase usually found in such Chinese documents.