Britain’s think tank Chatham House, aka Royal Institute of International Affairs (RIIA), is upset: China’s just concluded Fourth Plenum of the Communist Party made clear that its upcoming 2026-2030 Five Year Plan will be anchored on “technological self-reliance” as the driver of the economy, jettisoning focuses on GDP and “consumption” levels which obsess British monetarists.
“Since the founding of the People’s Republic, each Five-Year Plan has served as the backbone of Beijing’s policy direction. The plans have outlined not just where the leadership intends to steer the economy, but also how it wants to shape China’s place in the world,” Dr. Yu Jie, Senior Research Fellow on China for Chatham House’s Asia-Pacific Program acknowledges in his evaluation of the Plenum published Oct. 28.
“Judging from the published communiqué from the meeting, the key themes from the upcoming Five-Year Plan signal a clear break from every plan since the ‘reform and opening up’ era began under the leadership of Deng Xiaoping in 1978. It marks the final consolidation of the shift to use technology as the main driver of the economy…. The days of single-mindedly chasing nominal GDP growth are firmly a thing of the past,” he moans.
Yu views this as “a decisive shift in China’s growth model,” which aims towards “building a resilient economy anchored in domestic innovation and fortified manufacturing supply chains capable of weathering, as the communiqué puts it, ‘even dangerous storms.’” Thus, “global economists” (read London) who were hoping for “a renewed focus on domestic consumption,” efforts “to revive [China’s] sluggish property market or grant more financial autonomy to local governments” will be disappointed. China has instead adopted an “intense focus on addressing technological chokepoints.”
