China’s new Five-Year-Plan 2026-2030

A framework for societal development

The FYP is not a rigid control instrument but includes both strategic objectives and indicative targets, complemented by binding targets in selected areas (e.g., environment and energy). It provides a framework to guide responses to public concerns and expectations, while signalling economic stability and resilience to businesses and markets. The objectives are realized through a mix of central planning tools, sectoral programs, and local-level execution mechanisms.

The new FYP demonstrates a commitment to maintaining existing policies and highlights the importance of high-quality growth, technological independence, a resilient domestic market, and national security, with a stronger emphasis on risk prevention and security across economic, technological, and supply-chain domains.

The pillars of the 15th FYP are therefore as follows:

• strengthen China’s manufacturing base and industrial supply chains
• drive innovation to achieve independence in critical technologies
• promote domestic consumption
• advance green and low-carbon development
• strengthen national security and defence

Main objectives of the new FYP

The main objectives of the newly adopted FYP highlight several priorities for the future development of the Chinese economy and society. The key priorities of the FYP are:

Revitalization of the manufacturing industry and modernization of industry

• Strengthening the real economy
• Upgrading traditional industries such as metals, machinery, textiles, etc. through automation, digitalization, and green technologies
• Expanding advanced industries such as aerospace, new materials, and the low-altitude (drone) economy

Technological self-sufficiency and innovation

• Strengthening domestic research and technological autonomy to reduce dependence on foreign technologies
• Focusing on core technologies such as semiconductors, artificial intelligence (AI), robotics, biotechnology, quantum computing, and 6G mobile communications
• Unleashing further productive forces to drive growth by integrating innovation more effectively into industrial applications
• Increasing state support mechanisms (e.g., funding and industrial policy tools) for strategic technologies

“Beautiful China”: Green development

• Strengthening sustainability by accelerating ecological transformation
• Expanding renewable energy, electric vehicles, and energy storage, while increasing efforts to promote next-generation energy technologies (including hydrogen and advanced nuclear)
• Intensifying efforts in environmental remediation, protection, pollution control, and the circular economy
• Striving for global leadership in green technology

Economic self-reliance and strengthening of domestic consumption

• Retaining the “dual circulation” strategy of remaining connected with the global economy while strengthening domestic economic drivers
• Stimulating consumption by increasing household incomes, improving social welfare, and reducing social inequality
• Providing targeted subsidies for certain product categories, such as new energy vehicles (NEVs), household appliances, and certain services, while placing greater emphasis on long-term income growth and structural consumption drivers

Further opening up and global engagement

• Expanding opening-up with a focus on “high-quality” investments in areas such as telecommunications, biotechnology, healthcare, and education, and in industries consistent with China’s goals
• Continuing selective opening-up, with a more cautious and security-oriented approach to foreign investment and cross-border data flows
• Promoting green and digital trade

Social development and national security

• Improving living standards, particularly in the areas of education, healthcare, housing, and rural revitalization
• Supporting families through a “birth-friendly” environment
• Strengthening internal and external security and the armed forces, with elevated priority given to economic security, supply chain resilience, and financial risk control

The new FYP sets ambitious but more implementation-focused goals, supported by clearer policy instruments and governance mechanisms. Their realization will depend on both global factors – such as ongoing trade tensions, export controls, and geopolitical fragmentation – and domestic challenges, including local government debt and the lingering risk of deflation.

Opportunities for foreign investors

Despite China’s efforts towards self-reliance, the country emphasizes that it will remain open to foreign investment and ensure favorable conditions for foreign investors – particularly where such investment supports strategic priorities, while remaining subject to regulatory scrutiny in sensitive sectors.

Role of the Encouraged Foreign Investment Catalogue

The Catalogue of Encouraged Industries for Foreign Investment plays a key operational role under the 15th FYP. It translates broad strategic priorities into sectors and activities where foreign investment is explicitly welcomed and may receive certain incentives.

Key points of the catalogue are:

• Updated policy alignment to reflect the priorities of the 15th FYP, including advanced manufacturing, green technologies, the digital economy (within controlled areas), and healthcare/elderly care. Sensitive or security-relevant sectors are excluded
• Provision of certain incentives and benefits, including tax incentives, preferential approvals, land access, and potential subsidies for listed projects
• National and regional catalogues provide regionally differentiated, targeted opportunities aligned with development strategies in the Greater Bay Area, Yangtze River Delta, Beijing-Tianjin-Hebei, and western regions
• Inclusion in the catalogue indicates lower regulatory risk and higher political support, signaling acceptability, while exclusion signals higher scrutiny
• Functions as a positive counterpart to the Negative List, as the catalogue highlights priority sectors, while the Negative List restricts sensitive areas, and the remaining sectors are neutral but less incentivized

In short, the catalogue is the practical tool that shows foreign investors where China wants them to invest and how the government supports those investments.

Priority sectors for foreign investment

High-tech and advanced manufacturing

• High demand for expertise, technologies, and equipment in emerging industries such as biotechnology, renewable energy, electric vehicles, semiconductors, aerospace, and artificial intelligence (AI)
• Encouragement of cooperation (e.g., joint ventures, R&D collaboration, etc.) in approved and strategically relevant sectors

Green technology and sustainable development

• Fostering international cooperation in clean energy supply chains, climate finance, and environmental technologies
• Access to rapidly growing markets such as renewable energy, sustainable transport, and green infrastructure

Consumer goods and services

• Increased demand in sectors such as healthcare, education, tourism, entertainment, and e-commerce due to stronger domestic consumption
• Gradual and controlled liberalization in selected service sectors

Infrastructure and regional development

• Increasing demand for advanced engineering and technologies in smart infrastructure, transportation, and energy systems
• Continued focus on major regions such as the Greater Bay Area, the Yangtze River Delta, and the Beijing-Tianjin-Hebei region

Additional opportunities under the 15th FYP

Digital economy and data-driven industries

• Growth in cloud computing, AI applications, industrial software, and smart manufacturing
• Expansion of data centres and enterprise digital solutions within regulated frameworks

Healthcare, pharmaceuticals, and elderly care

• High-end medical devices, innovative drugs, and biotech solutions
• Expansion of private healthcare and elderly care services

Energy transition and power systems

• Grid modernization, energy storage, and hydrogen value chains
• Carbon capture, utilization, and storage (CCUS)

Supply chain localization

• Local production integration and high-end component supply
• Shift toward “in-China-for-China” business models

Financial services

• Asset management, insurance, pension products, green finance, and sustainable investments

Green urbanization and smart cities

• Smart city technologies, energy-efficient buildings, and environmental infrastructure

Agriculture and food security

• Agri-tech, precision farming, food safety solutions, and cold chain logistics

Education and human capital

• Vocational training, technical education, and workforce upskilling

Regional strategy-driven opportunities

• Greater Bay Area: innovation, finance, advanced manufacturing
• Yangtze River Delta: high-end manufacturing, digital economy
• Beijing-Tianjin-Hebei: technology, state-led innovation
• Western regions: infrastructure, energy, and resource development

Foreign investment will continue to be strategically guided by the Chinese government. The Encouraged Foreign Investment Catalogue provides the clearest guide for actionable and supported investment areas under the 15th FYP. Localization and integration into domestic ecosystems are key success factors. Regional differences in policy implementation create both opportunities and complexity.

Our approach

With over 30 years of experience supporting German and European companies in China, we have developed deep practical insight into local business practices, negotiation dynamics, and common risk scenarios. We have been supporting companies doing business, investing, or expanding in China with a comprehensive, opportunity- and risk-focused range of services from the outset. This experience enables us to identify opportunities and help companies structure investments, transactions, controls, and contracts in a way that optimizes outcomes and minimizes risks.