A five-year plan for China hashed out by leaders Monday (Oct. 26) is expected to focus on developing semiconductors and other such technology while Washington remains against letting the country access U.S. tech, the Associated Press (AP) reported.
The Chinese government is prioritizing self-sustaining growth in light of that development, with heightened domestic consumer spending and technology development. Export access has been hampered due to tensions with rivals. The strategy is called “dual circulation,” according to the Chinese government as reported by the AP. Economists have said it could raise costs and hamper productivity, although it could also decrease disruption and trade disputes with rivals, including the U.S.
The five-year plan is the foundation for the government’s industrial strategies in the heavily regulated economy. There have been 14 since the 1950s. The Global Times newspaper, quoted by the AP, said the plan will work to “drive China’s manufacturing industry and push it up the global value chain while strategically ensuring domestic supply.”
“Achieving independence in key areas, such as scientific research and finance, is expected to be a focus,” the report stated, according to the AP.
Semiconductor development is expected to be highlighted in the yet-to-be-released plan, alongside more development for things like smartphones, which are China’s biggest digital import by value, next-generation telecoms, artificial intelligence (AI) and more, the AP reported. Macquarie economists Larry Hu and Xinyu Ji wrote that the new plan is a “potential decoupling” with the U.S.
The pandemic, which began in China, had an effect on the country like it did elsewhere in the world. The country predicted its economy would shrink this year. The gross domestic product (GDP) compressed 6.8 percent in the first quarter, according to a survey. The U.S.-based China Beige Book said the economy was likely to stay contracted all year and beyond until the global economy began to recover more robustly.