China pushes for technological self-reliance amid economic pressure and geopolitical tensions

Beijing is adopting a cautious and inward-looking policy stance in the near term

China’s annual legislative sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference - collectively known as the “two sessions” - concluded on 12 March. The meetings unveiled the 15th Five-Year Plan (2026–2030). The Government Work Report delivered by Premier Li Qiang and the draft plan reinforce technological self-reliance as the guiding principle of China’s broader economic strategy.

China’s annual “two sessions” rarely produce surprises, and the announcements largely echoed positions already outlined in official meetings and speeches since the Fourth Plenum of the 20th Party Congress in October 2025. The party leadership reiterated that “managing the country’s own affairs well” has become a key mantra. Central to this approach is achieving breakthroughs in core technologies to drive innovation, sustain economic growth and shield the domestic economy from geopolitical and geoeconomic disruptions.

Plugging short-term vulnerabilities

The 15th Five-Year Plan has been unveiled against the backdrop of a decade-long effort by the Chinese leadership to transform labour-intensive manufacturing and the export-led growth model into what official documents describe as a “new development pattern” - an economy driven by advanced technology and stronger domestic demand.

China has pursued this transition through long-term state-backed programmes such as Made in China 2025, launched in 2015. Despite progress, the transition has been uneven. Domestic economic pressures and external developments have complicated the shift in recent years.

Policymakers nevertheless remain focused on long-term objectives, including the second centenary goal of “basically realising socialist modernisation by 2035”. Another earlier target - eliminating extreme poverty - was declared achieved in 2020.

President Xi Jinping told delegates that China “needs to cope with a more complex environment and resolve more deep-seated contradictions”. He was referring to economic pressures at home, intensifying geopolitical competition and vulnerabilities such as access to high-end technologies, particularly advanced semiconductor chips.

Tech self-reliance a political priority

The 140-page 15th Five-Year Plan builds on initiatives introduced during the past five years. Two programmes aimed at expanding technological applications - the Building Digital China initiative and the Artificial Intelligence+ plan - feature prominently in the draft outline. These initiatives were launched in 2023 and 2025, respectively.

Similarly, the K2 visa programme, introduced in October 2025 to attract STEM talent, highlights Beijing’s emphasis on integrating talent development with technological innovation.

Over the past decade, and particularly amid growing competition with the US over advanced technologies and trade disputes, technological self-reliance has become a central pillar of China’s economic strategy. Policymakers have invested heavily in core technologies to ensure that the country does not face the problem of “not being able to obtain, buy, or beg for them”.

Although achieving self-sufficiency in semiconductor manufacturing equipment remains a major challenge, reiterating the sector’s importance signals that the state will continue directing significant financial resources towards it. This ambition aligns with the broader objective of “building an independent, complete, open and efficient national innovation system”. Achieving this goal depends on leadership in advanced technologies as well as policies aimed at boosting domestic demand.

Nevertheless, translating these ambitions into concrete outcomes will remain difficult despite continued state support.

Managing one's own affairs well

The 15th Five-Year Plan has been unveiled at a politically significant moment in China’s recent history and within a complex geopolitical environment. The process of selecting delegates to the 21st Party Congress has already begun at the local level and will culminate in October 2027 with the selection of a new leadership lineup.

For Xi, the next two years are politically crucial as he seeks to ensure that the next generation of leadership carries his political imprint. He is also widely expected to seek a fourth term as the top leader of the Communist Party of China.

Meanwhile, China’s economy faces several structural challenges, including mounting local government debt, sluggish domestic demand and trade pressures. These domestic difficulties are compounded by regional conflicts, technological and trade competition with the US and increasing pushback from other countries over trade imbalances.

Reflecting Xi’s message delivered to the party-state leadership at the Fourth Plenum in October 2025, Premier Li Qiang and other officials during the two sessions reiterated that “we must concentrate our efforts on managing our own affairs well,” underlining the focus on domestic priorities.

A key takeaway from the two sessions is that while China’s leadership remains committed to technological self-reliance and the structural transformation of its economy, it is adopting a cautious and inward-looking policy stance in the near term.

This caution reflects the seriousness of China’s current economic challenges and the difficulty of implementing the leadership’s long-term vision. However, this approach could evolve depending on shifts in global geopolitics and the emergence of a new leadership generation after the 21st Party Congress.

In the meantime, Chinese leaders are likely to seek relative stability in relations with major global actors such as the US and the European Union. US President Donald Trump’s planned visit to China in late March could help stabilise bilateral ties at least in the short term.

While China’s long-term foreign policy objectives remain unchanged, Beijing may moderate its global posture to create space to deal with economic challenges and their political consequences at home.

(Devendra Kumar is an associate fellow at the Centre of Excellence for Himalayan Studies, School of Humanities and Social Sciences, Shiv Nadar Institution of Eminence, Delhi-NCR. The views expressed are personal.)