It’s been a busy time at Trivium HQ.
We’ve been poring over China’s newly released Five-Year Plan (FYP) and Government Work Report (GWR), and parsing what they mean for clients.
Unsurprisingly, much of the conversation has focused on the usual macro questions – China’s GDP target, its consumption strategy, and the outlook for the property sector.
Then, of course, there’s tech: Between the FYP, GWR, and planning and budget documents from the macro planner (NDRC) and Ministry of Finance, Beijing has given us a lot to go on regarding China’s technology strategy for the next five years.
Since we can’t capture all of it in this note (though we’re always happy to brief clients directly), we’ll give you a quick dose of the most talked-about areas of the tech agenda – AI, self-reliance, and semiconductors.
First up, AI – which is dead center of Beijing’s digital economy agenda.
The plan calls for deepening the integration of AI across all sectors of the economy and society – from scientific research and industrial development to public services and social governance.
Accessible, high-quality data is a key piece of the puzzle: The plan calls for accelerating the construction of AI corpora and building high-quality datasets specifically for energy, transportation, manufacturing, education, healthcare, and finance.
The FYP also flags the development of a framework for the “reasonable use” of AI training data.
That’s a big deal, because the Chinese state sits on an enormous reservoir of data that the private sector cannot easily access.
Funneling that data toward AI training could give domestic model developers a meaningful edge over foreign competitors that lack equivalent access.
The FYP doubles down on the idea that AI-powered devices – such as smartphones, robots, wearables, and other next-gen consumer electronics – are vehicles for “intelligent consumption.”
To encourage adoption, AI-powered devices will be included in this year’s consumer goods subsidy programs.
Policymakers see a double win for consumption, not only by increasing purchases of the devices themselves but also by spurring purchases of AI-powered services through them.
Perhaps more interestingly, the FYP also signals that officials will focus on encouraging innovation “in multimodal intelligence, agentic AI, embodied intelligence, and swarm intelligence.”
The fact that agentic AI was only popularized in the past few months, yet still made its way into the FYP, highlights China’s characteristic – and sometimes startling – policy-response speed.
For those wondering if China has an AGI agenda, the plan gave us an answer – sort of: It says China will “explore development paths for general artificial intelligence” – the first explicit reference to AGI in a major Chinese national policy document.
But the cautious “exploring” hedging suggests Beijing is not yet convinced that current scaling approaches are the only route to more general AI capabilities.
It may also reflect reluctance to anchor national strategy to a still-contested concept.
Beyond AI, the 15th FYP also doubles down on a familiar priority: Technological self-reliance.
The plan dedicates a full section to self-reliance, calling on the state to take “extraordinary measures” to reduce reliance on foreign technologies – and demanding “decisive breakthroughs” in integrated circuits, industrial machine tools, high-end instruments, foundational software, advanced materials, and biomanufacturing.
Annoyingly, the FYP itself does not elaborate on what those “extraordinary measures” might look like.
But an article published alongside the plan in Study Times – the official journal of the Central Party School – offers some clues.
According to the article:
“When we say ‘take extraordinary measures’… it involves a comprehensive innovation in thinking patterns, organizational methods, and policy tools.”
“The US’s ‘CHIPS and Science Act’ and ‘Project Genesis,’ as well as the EU’s ‘European Chips Act,’ all utilize unconventional means such as legislation, massive subsidies, and localization requirements to compete for future industrial dominance.”
Reading between the lines, the message seems clear: Chinese policymakers should feel empowered to move faster and use a broader policy toolkit than they have in the past.
To be clear, no Two Sessions document explicitly calls for a sweeping domestic substitution drive or massive new subsidy programs in these sectors.
But the surrounding discourse suggests Beijing is increasingly willing to consider more aggressive policy tools.
On semiconductors in particular: Beijing made it clear that advancing in semiconductors isn’t just a short-term self-reliance play.
The Government Work Report designated semiconductors a “pillar industry,” alongside aerospace, biotech, and the low-altitude economy.
In Chinese policy lexicon, “pillar industries” are those with “large growth potential, high technology concentration, and broad market penetration.”
In other words, semiconductors are a load-bearing layer of the modern industrial system – underpinning everything from AI and robotics to electric vehicles and advanced manufacturing.
The focus is on “catching up” to relieve foreign chip “chokeholds,” but also, in tandem, “leapfrogging” to gain capabilities in new semiconductors for which no commercial supply chain yet exists – to power the broader industrial economy.
This dual designation will open the floodgates to more state support – including subsidies, cheap credit, procurement opportunities, and favorable regulations.
But frustratingly for Beijing, there is only so much the state can do to accelerate chip development cycles.
Ultimately, policymakers will have to wait for domestic manufacturers like CXMT and SMIC to make progress.
Taken together, the message from this year’s planning documents is pretty clear: China’s leaders see the next five years as a decisive window for technological competition.
AI will be embedded across the economy.
Policymakers will roll out a new policy playbook to pursue tech self-reliance.
And advancing in semiconductors, in particular, will remain a generational national project.
The direction of travel isn’t changing – but the urgency and scope of the policy response is ramping up.
That means almost certainly more tech ambition, more policy experimentation – and more friction with the Western world.
Kendra Schaefer, Head of Tech Research, Trivium China
What you missed
Econ and finance
China’s exports are going gangbusters. Per data released by the customs bureau (GAC) on March 10:
Exports during the first two months of the year surged 21.8% y/y – the fastest growth rate in over four years.
Imports grew 19.8% – the first double-digit increase since April 2024.
On March 6, Xi Jinping discussed medical and health reform with members of China’s top political advisory body (CPPCC).
Why it matters: Xi meets a group of CPPCC members each year on day three of the Two Sessions for a discussion centered around major policy priorities for the year.
In 2023, he used the meeting to emphasize support for private enterprises.
This year, health policy advisors and medical researchers presented on how to support innovative drug research, strengthen China’s weak grassroots primary care system, and expand the use of AI in healthcare.
Business environment
Policymakers are getting state-owned enterprises (SOEs) to focus on the industries that matter.
On March 5, Zhang Yuzhuo, head of the regulator overseeing non-financial SOEs (SASAC), announced that: “Within a few years, we will concentrate central SOE assets and operations in around 20 strategic industry categories, with over 88% of their revenue generated from these sectors.”
Central SOEs currently operate across 92 out of 97 industry categories defined by China’s statistical authorities.
The announcement presages a significant pullback in the breadth of this activity.
Politics
Central Party School trainings for up-and-coming officials are increasingly focused on economic security.
A local health official who recently attended such a training described it to SCMP: “The attendees learned about the external economic security challenges facing China and how the country could best respond through careful planning and preparing countermeasures.”
A teacher at such courses said there has been a noticeable change in recent years: “‘The top leadership believe that all the future leaders, regardless of their background and their job function, must have a good sense of China’s greatest strength and Achilles’ heels,’ said the scholar.”
Agriculture and rural affairs
The 15th Five-Year Plan (FYP) raised China’s top-line grain production capacity target to 725 million metric tons by 2030, up from 650 million metric tons in in the last FYP.
Food security has long been a top priority for China’s leaders – but the last FYP was the first time that Beijing set a binding grain production target.
The 650 million metric ton target wasn’t ambitious – output had already exceeded that level for several years.
The new target is more of a reach: 2025 staple crop output broke records, but still fell short of 715 million tons, leaving an over 10 million metric ton gap to close by 2030.
US-China
On Wednesday, the Office of the US Trade Representative announced it was launching a Section 301 investigation into excess capacity among 16 US trade partners, including China.
We knew this was coming: US Trade Representative Jamieson Greer signaled that his team would look for channels to reimpose tariffs following the US Supreme Court’s ruling that US President Donald Trump’s Liberation Day tariffs were illegal.
Greer said his office would be accepting public comment through April 15 with a public hearing scheduled for around May 5.
He also said that an additional probe investigating forced labor practices in more than 60 countries is coming down the pike.
Prospects for US President Donald Trump’s visit to China are dimming by the day.
On Monday, the SCMP scooped that Trump’s visit will be confined to Beijing with no plans to visit a second location in China.
Sources say this is mostly down to Trump’s “very tight” schedule, but could also be a function of a widely reported lack of American advance planning.
As always, it was a busy week in China.
Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.