China: What the Five-Year Plan means for business

Why should I read this?

In March 2026, China’s top legislature released its 15th Five-Year Plan (Plan), setting national priorities from 2026 to 2030. The Plan sets out 20 national indicators and more than 100 major projects, which will guide regulatory change, investment priorities and sector development across the economy. It will shape lawmaking, regulation, public investment and economic policy, including in science and technology. Its focus includes industrial upgrading, strengthening scientific and technological capability, expanding domestic demand and the continued (but selective) opening of its markets.

Since its launch, related developments include the publication of China’s lawmaking agenda and consultations (now closed) on draft laws covering defence, state-owned assets, healthcare, water and agriculture. These are all priority areas under the Plan.

For foreign businesses with operations in China or that are connected to China through trade or supply chains, the Plan has practical implications. It affects market access, cross-border activity, technology use, data handling, investment conditions, supply chain planning and sustainability requirements.

For businesses, this points to a more policy-led and competitive environment. Foreign companies, particularly in priority sectors, may face stronger domestic competition and higher expectations around localization, security and compliance. At the same time, those that help build China’s domestic capability are likely to see opportunities and may benefit from clearer rules and gradual access expansion in selected industries.

What are some of the key changes?

• A clearer pipeline of priority sectors is emerging, moving from upgrading traditional industries to backing emerging and future industries. This is likely to accelerate pilots, standards and public procurement in areas such as low altitude aviation and biomanufacturing.
• Supply chain security is a core focus. China aims to reduce reliance on foreign technologies through domestic alternatives, specialized materials and tighter control of key resources such as rare earths.
• Technology remains central. China is increasing efforts to reduce dependence on foreign suppliers in areas such as semiconductors, software, advanced machinery and biotechnology, alongside broader industrial upgrades using AI and robotics.
• Investment in digital infrastructure will continue, with stricter rules for data use, AI safety, accountability and cross-border data transfers. AI governance frameworks and a more formalized national data market are also expected.
• Environmental goals feature strongly. Clean energy use will expand, while fossil fuels remain part of the energy mix during the transition. Energy security and mineral supply chains are treated as core concerns.
• The services sector is expected to play a larger role, with easier entry for foreign companies and clearer standards. China also aims to expand services and digital trade.
• The Plan confirms ongoing support for the “one country, two systems” model, acknowledging Hong Kong’s role as an international finance and innovation centre. Businesses based in Hong Kong are encouraged to participate in Belt and Road and green projects, with cooperation shifting toward lower carbon and more digital activity, alongside stronger risk controls.

Why does this matter for foreign businesses?

The Plan has been issued at a time of global instability and economic uncertainty. It represents China’s aim to shift from growth driven by scale toward growth driven by technology, productivity and domestic demand. The country is concentrating on a narrower set of priorities, including building independence in science and technology, expanding clean energy and strengthening domestic consumption through a more unified national market.

At the same time, China is continuing to open parts of its economy to foreign investment, but more gradually and selectively. Foreign investment policy is becoming more selective, focusing on higher quality investment in priority sectors. China is also looking to play a stronger role in shaping international rules in areas such as AI, digital trade and emerging technologies.

For businesses, this means operating in a more policy-led environment, with greater emphasis on meeting increased reporting, compliance and regulatory requirements. Longer term success is likely to depend on how closely business activity fits within China’s overall policy direction.

Boards should consider mapping their business strategy against the Plan’s main indicators and major projects, particularly in areas such as emerging industries, green technologies and digital infrastructure. Data policies and digital operations should be reviewed against rules on data rights and its use, AI safety and cross-border transfers. Companies should also assess supply chain resilience and exposure to export controls, given the increased focus on domestic sourcing and tighter regulation of critical inputs.