How China’s Five Year Plans have changed the world

China’s top leaders are meeting in Beijing this week to decide on the country’s key goals and aspirations for the rest of the decade.

Every year or so, the country’s highest political body, the Central Committee of the Communist Party of China, meets for a week of meetings, also known as a plenum.

What it decides in this regard will ultimately form the basis for China’s next five-year plan – the blueprint that the world’s second-largest economy will follow between 2026 and 2030.

The full plan won’t be released until next year, but officials are likely to hint at its contents on Wednesday and have already provided more details within a week of that.

“Western politics operates on electoral cycles, but Chinese policymaking operates on planning cycles,” says Neil Thomas, a China politics fellow at the Asia Society Policy Institute.

“Five-year plans clarify what China wants to achieve, indicate the direction the leadership wants to take, and move the country’s resources toward these pre-determined conclusions,” he adds.

On the surface, the idea of ​​hundreds of convenient bureaucrats shaking hands and making plans may seem dull – but history tells us that what they decide often has huge ramifications for the world.

Here are three times China’s five-year plan reshaped the global economy.

It is difficult to pinpoint exactly when China began its journey to becoming an economic power, but many in the party like to say it was December 18, 1978.

For nearly three decades, the Chinese economy has been strictly state-controlled. But Soviet-style central planning failed to raise prosperity, and many were still poor.

The country was still recovering from Mao Zedong’s rule Destroyed base. The Great Leap Forward and the Cultural Revolution—campaigns led by the founder of Communist China to reshape the country’s economy and society—resulted in the deaths of millions of people.

Addressing the third plenary session of the Eleventh Committee in Beijing, the country’s new leader Deng Xiaoping declared that it was time to embrace some elements of the free market.

His policy of “reform and opening-up” became an integral part of the next five-year plan, which began in 1981.

The establishment of free trade special economic zones – and the foreign investment they attracted – transformed people’s lives in China.

According to Mr. Thomas, the goals of the five-year plan could not have been achieved with greater certainty.

“China today exceeds the wildest dreams of people in the 1970s,” he says. He says: “In terms of restoring national pride and consolidating its position among the world’s great powers.”

But it has also radically reshaped the global economy. By the 21st century, millions of Western manufacturing jobs had been outsourced to new factories in China’s coastal regions.

Economists have called this the “China shock,” and it has been one of the driving forces behind the rise of populist parties in former industrial parts of Europe and the United States.

For example, Donald Trump’s economic policies – tariffs and trade wars – aim to bring back the American manufacturing jobs lost to China over the past few decades.

China’s status as the world’s workshop was cemented once it joined the World Trade Organization in 2001. But at the turn of the century, the Communist Party leadership was already planning its next move.

She was wary of China falling into the so-called “middle-income trap.” This occurs when an upwardly mobile country cannot offer very low wages anymore, but at the same time it does not have the creative capacity to create the advanced goods and services of an advanced economy.

So, instead of settling for cheap manufacturing, China needed to create what it called “strategic emerging industries” – a term that was first officially used in 2010. For China’s leaders, this meant green technology, such as electric cars and solar panels.

As climate change becomes increasingly important in Western policy, China has marshaled an unprecedented amount of resources into these new industries.

Today, China is not only the undisputed world leader in renewables and electric vehicles, it also has a monopoly on the rare earth supply chains needed to build them.

China’s stranglehold on these key resources – which are also crucial to the chip industry and artificial intelligence – now puts it in a powerful position globally.

So much so that Trump described Beijing’s recent move to tighten export controls on rare earth elements as an attempt to “hold the world captive.”

Although “emerging strategic powers” ​​were enshrined in the next five-year plan in 2011, green technology was identified as a potential driver of growth and geopolitical power by then-Chinese leader Hu Jintao in the early 2000s.

“This desire in China to become more self-reliant in its economy, in technology, and in freedom of labor, goes back a long way – it is part of the fabric of the Chinese Communist Party’s ideology,” Neil Thomas explains.

This may explain why China’s five-year plans have recently turned their attention towards “high-quality development,” which Xi Jinping formally introduced in 2017.

This means challenging US dominance in technology and putting China at the forefront of this sector.

Local success stories such as video-sharing app TikTok, telecom giant Huawei and even DeepSeek, an artificial intelligence model, are all testament to China’s technological boom this century.

But Western countries increasingly see this as a threat to their national security. The ban or subsequent attempted bans on popular Chinese technology affected millions of internet users around the world and sparked bitter diplomatic disputes.

Until now, China has been fueling its technological success using American ingenuity, such as Nvidia’s advanced semiconductors.

And since Washington has now blocked its sale to China, “high-quality development” is expected to turn into “new high-quality productive forces” — a new slogan introduced by Xi in 2023, which tilts the focus more toward domestic pride and national security.

This means putting China at the forefront of chipmaking, computing and artificial intelligence – without dependence on Western technology and immune to embargoes.

Self-sufficiency in all fields, especially at the peak of creativity, is likely to be one of the basic principles of the next five-year plan.

“National security and technological independence are now the defining mission of Chinese economic policy,” Thomas explains.

“Again, it goes back to that nationalist project that supports communism in China, to ensure that it is not dominated by foreign countries again.”