2025-11-28
On October 28, 2025, Xinhua News Agency officially released the Communist Party of China (CPC) Central Committee’s Recommendations on Formulating the 15th Five-Year Plan for National Economic and Social Development (hereafter the "Recommendations"). As a guiding document for China’s medium-term development, it outlines a systematic roadmap for Chinese-style modernization, anchored by three core pillars: fostering new-quality productive forces, consolidating the institutional foundation for a strong financial sector, and expanding the domestic demand market. This framework clarifies paths for industrial upgrading and market investment while laying a solid base for stable economic growth amid complex internal and external environments.
The Recommendations stress that a modern industrial system is the material and technological foundation of Chinese-style modernization. It explicitly centers on the real economy for economic development, adheres to the direction of intelligentization, greenization, and integration, and accelerates building China into a manufacturing power, quality power, aerospace power, transportation power, and cyber power. To strengthen industrial fundamentals, the document emphasizes maintaining a reasonable share of manufacturing in the national economy and developing a modern industrial system with advanced manufacturing as its backbone.
For industrial structure optimization, the Recommendations propose a three-part strategy: upgrading traditional industries to shore up their competitiveness in the global industrial chain, nurturing emerging pillar industries via industrial innovation projects, integrating innovation infrastructure, tech R&D, and product iteration to speed up the development of strategic emerging industry clusters, pre-positioning future industries to form a gradient development ecosystem.
Scientific and technological innovation has been positioned as the core driver of new-quality productive forces. As outlined in the Recommendations, efforts should be made to seize the opportunities presented by the new round of scientific and technological revolution and industrial transformation. It also calls for advancing the coordinated development of a strong education country, a strong science and technology country, and a strong talent country, so as to enhance the overall effectiveness of the national innovation system.
To break through technological bottlenecks, the Recommendations advocate stepping up basic research and tackling core technologies in key areas through the new nationwide system. At the same time, it stresses the need to consolidate the country’s independent support capacity for scientific and technological infrastructure.
Notably, the deployment for industrial upgrading outlined in the Recommendations strikes a balance between "foundation preservation" and "breakthrough innovation." Guided by an intelligentization-, greenization-, and integration-oriented approach, it establishes a gradient industrial ecosystem structured around three pillars: "quality upgrading of traditional industries, development of emerging pillar industries, and cultivation of future industries" — ensuring seamless alignment between industrial inheritance and innovation.
More importantly, the Recommendations place a strong emphasis on facilitating in-depth integration between scientific and technological innovation and industrial innovation. By means of initiatives including enhancing the independent and controllable nature of industrial chains and rebuilding industrial foundations, it enhances the overall competitiveness of China’s industrial sector on the global stage.
The Recommendations frame building a financial powerhouse as central to upgrading China’s modern economic system, outlining key institutional initiatives. For macro-control, it calls for refining the central bank system, establishing a science-based monetary policy framework paired with comprehensive macro-prudential management, and smoothing policy transmission to ensure support reaches the real economy.
A core shift targets financial function transformation: scaling tech finance, green finance, inclusive finance, pension finance, and digital finance to redirect capital from traditional sectors to national strategic priorities and emerging industries—moving from "scale expansion to value creation." Capital market reforms emphasize boosting inclusivity, expanding direct financing, and advancing futures, derivatives, and asset securitization, alongside upgrading financial infrastructure.
Risk mitigation forms the backbone: the plan mandates tighter cross-level supervision coordination and enhanced risk disposal tools, creating an institutional loop where the "dual-pillar framework" (monetary policy + macro-prudential management) ensures stability, the five finance pillars drive upgrading, and strict oversight guards against turbulence. As noted at the 2025 Financial Street Forum, regulators are embedding these reforms into the "tech independence - modern industrial system - high-level market economy" chain, linking finance directly to industrial upgrading.
Labeled a "strategic anchor" for Chinese-style modernization, domestic demand expansion ties "livelihood-driven consumption" to "asset and human capital investment," aiming to align new supply with emerging demand and strengthen economic self-reliance.
To boost consumption, the plan targets employment growth and income hikes, while increasing public service spending and easing restrictions on service sectors to unlock potential. For investment, it balances growth with efficiency: optimizing government spending on livelihoods and national strategic projects, while using policy tools to attract private capital and fix low-efficiency issues.
Clearing circulation bottlenecks takes aim at "disorderly competition" through unified supervision, stricter quality controls, and intensified antitrust enforcement—removing factor flow barriers to build a "quality-for-price" market order. This "consumption-led, investment-complementary, barrier-free" framework synergizes with financial and industrial policies, providing market space for new-quality productive forces.
Summary and Outlook
The Recommendations forge a tightly interconnected development system centered on "tech innovation as the core driver, modern finance as solid support, and domestic demand as the fundamental foundation". Specifically, on the supply side, it upgrades traditional and emerging industries via digital-green integration. On the support side, it effectively channels capital to the real economy through targeted financial instruments and policy levers. On the demand side, it smooths and unblocks economic cycles via consumption boosts and national market unification.
For investors, key opportunities lie in: policy-backed tech (domestic computing power, industrial machinery), strategic emerging sectors (new energy, low-altitude economy), and consumption/industries benefiting from competition reforms. Risks include policy implementation gaps, geopolitical headwinds, and capital market volatility—factors closely tied to the plan’s success.
Contact Information
Company：Huafu Securities Co., Ltd
Contact Person: Zhiqiang Ren, Puhan Zhou, Mengfei Zhang
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Website: https://www.hfzq.com.cn/
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City: Shanghai, China
