BAKU, Azerbaijan, January 21. When China’s 15th Five-Year Plan was enacted in early 2026, it initially appeared unremarkable, a characteristic typical of five-year plans. Yet, beneath the conventional rhetoric surrounding "high-quality growth," a more focused and urgent objective emerges: the need to reduce reliance on foreign technology in areas where external pressures have proven to be costly. Sectors such as semiconductors, artificial intelligence, and quantum computing, once regarded merely as strategic priorities, are now explicitly identified as vulnerabilities that must be addressed within the duration of this planning cycle.
This shift in emphasis becomes particularly evident when contrasted with the preceding 14th Five-Year Plan (2021–2025). The earlier plan championed the concept of "dual circulation," aiming to strike a balance between stimulating domestic demand and maintaining openness to global markets. This approach yielded measurable outcomes: GDP growth averaged over 5% despite the disruptions of the pandemic, domestic consumption contributed more than 86% of overall growth, and research and development expenditure surged nearly 50% relative to 2020. As a result, China ascended to the top ten of the Global Innovation Index and became the world’s leading source of patent applications.
However, these achievements did not translate into technological security in the critical areas of strategic importance. By the close of 2025, semiconductor self-sufficiency remained a mere 30%. Similarly, advanced manufacturing equipment, particularly in the domain of lithography, remained heavily reliant on imports. The imposition of U.S. export controls exposed these vulnerabilities, rendering them not only economically problematic but, from Beijing’s standpoint, politically untenable. The 15th Five-Year Plan, therefore, represents a strategic response to these realities, rather than a mere continuation of prior optimism surrounding globalization.
The promise embedded within the new plan is unequivocal. Should China achieve self-sufficiency in semiconductors, artificial intelligence hardware, and next-generation computing systems, it would substantially mitigate the risk of external disruptions across its economy. Sectors such as manufacturing, energy, transportation, and defense would be less susceptible to foreign policy decisions. In the realm of artificial intelligence, where China already hosts more than 4,500 companies and produces models approaching global benchmarks at significantly lower costs, deeper integration of AI could enhance productivity not only in the technology sector but also across traditional industries. In quantum technologies, an area in which China has made substantial early investments, the country stands to gain a competitive edge in secure communications and specialized computing well before these technologies reach maturity in other regions.
There is also an economic logic behind the strategy. During the 14th plan, high-tech manufacturing value added rose more than 40%, and R&D intensity approached the OECD average. The leadership argues that the next stage of growth cannot come from more infrastructure or property investment, but from applying technology to raise efficiency. If that works, China could sustain moderate growth even as its workforce shrinks and external demand becomes less reliable.
But the risks are equally concrete. Building full technology stacks domestically is expensive and slow. Semiconductor manufacturing is not just about fabs; it depends on ecosystems of materials, precision components, software tools, and accumulated know-how. Despite massive state investment - more than $150 billion directed into chips over the past decade - China still lags in key equipment segments. Catching up by 2030 is possible in some areas, but unlikely across the board.
There is also a question of efficiency. State-led investment can mobilize capital quickly, but it can also lead to duplication and weak incentives. China’s chip sector already shows signs of overcapacity in mature nodes, while advanced processes remain constrained. If similar patterns appear in AI hardware or quantum systems, the result could be high spending with limited commercial payoff.
Internationally, the plan cuts both ways. A push for technological independence reduces China’s openness in sensitive areas and may accelerate fragmentation in global supply chains. At the same time, Beijing has been careful not to close the door entirely. The 2026 tariff adjustments lowered import duties on hundreds of products that China still cannot supply at scale, from advanced manufacturing components to medical technologies. That suggests policymakers recognize the need for foreign inputs during the transition, even as they plan to replace them over time.
For foreign companies, this creates a narrow and shifting window. In the short term, there are opportunities to supply components and materials that China lacks. In the longer term, successful localization will reduce that space, particularly in strategic sectors. Whether this leads to a cleaner division of technological blocs or continued interdependence at lower levels remains an open question.
The 15th Five-Year Plan does not provide a definitive prognosis of success or failure. Rather, it delineates a more transparent set of trade-offs. Achieving greater resilience may entail higher financial commitments and slower gains in efficiency. Furthermore, a reduced exposure to foreign sanctions could come at the expense of diminishing the benefits derived from global collaboration. For China, the key challenge lies in translating political urgency into actionable technological advancements, while avoiding the entrenchment of rigid systems that could hinder future reforms.
Ultimately, whether this strategy fortifies China’s economic position or limits its strategic options will hinge less on the rhetoric of the plan and more on its effective implementation. The plan is still in its infancy, and its long-term outcomes—whether it results in autonomy coupled with flexibility or isolation marked by friction- will become evident well before 2030.