In business, the five Ps are often referenced: “Poor preparation prevents proper performance.” That extends to planning a national economy.

China has just done that in its 4th Plenary Session of the 20th Central Committee of the Communist Party of China, held from 20 to 23 October, where it laid out its 15th Five Year Plan (2026-30).

The contrast could not be clearer with its competing superpower, the US, where policy swings from one economic plan to another, with seemingly little, or no, logical pattern guiding the changes.

Budgetary disagreements between the two US parties, the Republicans and the Democrats, currently have whole segments of government shut down into a second month. Meanwhile, Donald Trump’s erratic tariff policies, rates set one day, then varied the next, have thrown a spanner into the workings of the US economy by making planning more difficult, while pushing up consumer prices and fuelling inflation. The US Government has also come into conflict with the Federal Reserve, pressuring it, despite an inflationary environment, to cut interest rates, then threatening to undermine its independence when it fails to comply with Trump’s dictates.

So what has China determined for its next five years? First, it ought be noted, the plenary session made no abrupt changes to directions set in the previous plan. Such consistency and continuity in planning delivers predictability. Investment flows, trade planning, infrastructure development and the identification and prioritisation of new technologies all benefit from such consistent planning. Each of these has been critical in China’s continued rise. 

In this five-year plan, China seeks to complete its transition toward an advanced, innovation-led economy, a core component in that being the movement from “made in China” to being “designed in China”. 

In such previous planning, new and emerging technologies have been identified and fostered. Examples are found in China’s development of green energy (solar and wind energies), progress in EVs, digital infrastructure and robotics, along with the mining and processing of the rare earths necessary for these. Careful long-term planning has led to China’s dominance in all these areas, while also making further advances into quantum computing, 6G, semiconductors, green hydrogen, bio-technology and fusion energy. 

Given actions, led by the US with goal of limiting Chinese access to semiconductors, advanced chips and other AI technologies, the latest five-year plan strategically highlights China’s need to be self-reliant in these technologies.

The plan also makes clear that economic development does not just exist for itself, but rather is framed by the need to strengthen social equity and welfare through increased social services, while also supporting environmentally sustainable growth. The plan sharpens China’s focus on high-quality development and makes clear that growth must be rooted in sustainability and social equity.

Core to the latest plan is linking of scientific research to industrial development.

Of course, this planning, with state support, does not only benefit Chinese companies and investors, but also global players. This five-year plan further commits China to expanded economic reform and openness by offering stable policy and market predictability, within a clear regulatory environment and strong legal framework. To that end, Beijing continues to welcome foreign investment and international collaboration.

Chinese R & D, pushing further up the “value chain”, with high-tech development, is clearly powerfully attractive for many global investors, keen to invest in new growth industries. Long gone are the days of China’s growth being powered by it being the low-cost manufacturing hub of the world. 

In an increasingly fractured world, retreating into trading blocs, with global free trade under attack, the plan also emphasises the need to increase internal consumer demand as part of the existing “dual circulation” framework. China, the world’s largest trading nation, has in the past been vulnerable to actions by other nations, hence the plan to boost internal consumption. To achieve this, the current plan aims to raise household incomes and employment opportunities.

Successive five-year plans have enabled China to grow at a sustained high rate, over the past 45 years in particular. The careful strategic thinking behind this latest plan puts China in good stead to maintain that steady growth despite global economic headwinds.

The views expressed in this article may or may not reflect those of Pearls and Irritations.