在更具挑战的世界中更具信心的中国

EconomicsChina Macro AsiaChina A More Confident China in a MoreChallenging World Yi Xiong, Ph.D.Chief Economist+852-2203 6139 nThe 20th Central Committee of the Chinese Communist Party recentlyconcluded its Fourth Plenum, issuing a concise communique that offers arevealing insight into the priorities and mindset of China's leadership asthey chart a course for the next five years. Perry KojodjojoStrategist+852-2203 6153 nOur main takeaway is Chinese leaders have become more confident inChina'stechnological capabilities and economic resilience,despiteobserving a more changing external environment for the coming years.They have adjust policy priorities accordingly and three new priorities standout to us: accelerating technological application/commercialization byindustries, strengthening economic ties with outside world, and improvingpeople's wellbeing. Hazel LaiMacro Strategist+852-2203-6150 Deyun OuEconomist+852-2203 6166 nWe think these policies will benefit innovative private firms in emergingindustries, accelerate Renminbi's internationalization, and boost domesticconsumption. We continue to bias for higher rates in China. For FX, we thinkthat the FYP is generally supportive of further RMB strength. The 20th Central Committee of the Chinese Communist Party concluded its FourthPlenum and issued its communique on Thursday. The statement itself is short andbrief. More detailed policies will be released when the Central Committee formallyannounces its Recommendations for the 15th Five-Year Plan; after that, thegovernment will then work on drafting the detailed FYP for approval by the NationalPeople's Congress in March 2026. For now, we focus on Thursday's statement, which we think is still of greatimportance as it offer a revealing glimpse into the mindset of China's leadershipwhen they see the country's priority for the next five years. The Goal: 2035 Vision A central theme of the plenum’s outcomes is the determined pursuit of the "2035Vision"—a goal to transform China into a "mid-level developed country" by 2035.Originally envisioned by Deng Xiaoping in the 1980s and officially announced byPresident Xi Jinping in 2020, this vision remains at the forefront of China's policyagenda. Five years after its formal announcement, Chinese leaders are assessingtheir progress and adjusting strategies to meet new and evolving challenges. Theplenum communiquébegins by recognizing the achievements 25 October 2025China Macro accomplished during the 14th Five-Year Plan period (2021–2025). Over theseyears, China’s economy has expanded steadily, with per capita GDP surpassing theUS$13,000 threshold, firmly establishing China in the upper-middle-incomecategory.These accomplishments,achieved despite global supply chaindisruptions, trade tensions, and the unprecedented COVID-19 pandemic, form thefoundation of the leadership’s growing confidence. The communiqué states: "Oureconomy is on solid foundations, demonstrating advantages in many areas, strongresilience, and great potential." The communique did not mention the target of doubling China's income by 2035from 2020 levels.It would be important to watch if this target will be mentioned inthe upcoming Recommendations. Achieving this target will imply that China stillneed to deliver 4.5% - 5% growth annually in the next 5 - 10 years. We think thetarget will unlikely be dropped. The Challenge: changing geopolitical landscape Despite these achievements, the plenum adopted a cautious outlook for theforthcoming 15th Five-Year Plan period (2026–2030), describing it as a time of"profound and intricate changes." The Party emphasized the need to "carry forwardour struggle, and dare to brave high winds, choppy waters, and even dangerousstorms"—a notably strong expression in official Chinese discourse. This languagereflects the leadership's assessment that the strategic window of opportunity forChina's development may be closing, as relations with the US-led West shift fromcollaboration toward competition, or even rivalry. Nevertheless, Chinese leaders remain confident in their chosen path and theirability to achieve the 2035 Vision.They have even expanded their objectives,aiming not only for stronger economic, technological, and comprehensive nationalstrength, but also adding two new objectives: significantly enhancednationaldefense capabilitiesandinternational influenceby 2035. The Means: 12 policy prioritiesTo achieve these ambitious goals, the communiqué elaborates on twelve priority policy areas for the next five years. These priorities are, namely: 1) ModernIndustrial System, 2) Science & Technology Self-Reliance, 3) a strong domesticmarket, 4) economic institutional reforms, 5) High-Standard Opening Up, 6) RuralRevitalization, 7) Regional Coordination, 8) Cultural Development, 9) PublicWellbeing, 10) Green Transition, 11) National Security, and 12) National Defense. These priorities closely mirror those of the 14th Five-Year Plan, demonstratingthe leadership’s