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Jane Cai

Meredith Chen

China’s economic leapfrog into global second place, along with its eradication of extreme poverty, has been achieved through an array of plans covering the long and short term, while ranging from specific industries to the country as a whole.
The best known of these blueprints is the five-year plan for national economic and social development, which sheds light on Beijing’s priorities for the medium term and features some quantifiable and comprehensive goalposts.
This is the last year of China’s 14th strategic five-year plan, which has covered a period characterised by the prominent role given to supply chain and hi-tech self-reliance.
As Beijing puts the finishing touches on the 2026-30 plan, which will be made public in March next year, the intensifying strategic rivalry with the US has generated new interest in what China’s road map will look like for the next five years.
During a symposium with provincial heads on Wednesday, President Xi Jinping urged officials to adapt to the “changes in the international environment”, improve foresight and optimise the economic layout while drafting the five-year plan.
A draft national development planning law – the first of its kind – was submitted to the top legislative body, the Standing Committee of the 14th National People’s Congress, for its first reading.
The law, which was considered during the committee’s four-day 15th session which began on Sunday, is expected to formalise processes and implementation at local levels, elevating planning to a new political height.
It is the latest step in the policy planning system’s evolution from its command-economy roots that China inherited from the Soviet Union in the 1950s. Despite the changes, the five-year plans continue to play an important role in the country’s development.
When was China’s first five-year plan?
Under the leadership of founding father Mao Zedong, China looked to Moscow’s model of economic planning for its first five-year plan, which went through several drafts before it was officially approved in mid-1955.
The plan was developed with advice from Moscow and set out to ensure that large-scale defence, industrial and energy projects were carried out “under proper guidance, avoiding potential blind actions”.
More than 150 Russian-backed projects were given the go-ahead under the first five-year plan, with the aim of building China’s industrial capacity, virtually from scratch.




How is a plan developed?
Since the 1990s, the Communist Party’s Central Committee has dedicated its fifth annual plenary session to evaluating the results of the previous five-year plan and considering general proposals and recommendations for the next one.
Formulation of the new plan typically begins midway through the life of its predecessor and generally takes two to three years. The process involves a series of rounds including evaluation, preliminary research, drafting and revisions, as well as soliciting public input.
Next, the State Council drafts an outline which is submitted to the National People’s Congress, China’s legislature, before it is approved and officially announced and implemented.
How has planning evolved?
It took decades for today’s structured and systematic approach to evolve from the cyclical planning of the 1950s.
The flaws and inefficiencies of the original Soviet Union model – including unrealistic production targets, low-quality goods, and an unbalanced economic structure with an underweight service sector – had become more pronounced over the years.
China finally put an end to the decades-long debate about its economic path in 1992, when it embraced the market. Then-party chief Jiang Zemin declared that the purpose of the country’s economic reforms was to build up a “socialist market economy system”.
Over the next decade, China’s approach to economic planning became more strategic and comprehensive, eventually combining top-down administrative directives with bottom-up flexible innovation that allowed both market and government to play their roles.


The launch of the 11th five-year plan in 2006 also marked a change in terminology – from jihua which means “planning” to guiha, a term that emphasises both guidance and planning.
The change reflected the significant shift in China’s economic system, from a centrally planned economy that relied heavily on detailed government control to a more market-oriented system that allows some flexibility.
Notable plans
The third five-year plan (1966–1970), which kicked off with the decade-long Cultural Revolution that disrupted the economy, was never officially approved. During the havoc that followed, the next plan was only issued in draft form.
This set unrealistically ambitious economic targets and also focused on relocating critical facilities away from the country’s most densely populated areas to its western hinterlands – driven by fears of a nuclear attack amid deepening US involvement in Vietnam and growing hostility between Beijing and Moscow. Most targets were not reached.
The eighth five-year plan (1991-1995) was one of the most successful, thanks to the fundamental changes that were taking place in the way China managed its economy. Public perceptions were also changing.
In 1992, late paramount leader Deng Xiaoping made his tour of southern cities, throwing his weight behind their economic success and setting the country firmly on the reform and opening up path.
The national economy’s sustained, rapid growth over the course of the eighth plan meant that China achieved its goal of quadrupling GDP from its 1980 level by 1995 – five years ahead of schedule.
After emerging as one of the world’s largest industrial powers, China’s next decisive leap occurred during the 13th plan, from 2016 to 2020, when the country declared victory against extreme poverty and made huge strides in hi-tech and innovation.


Hits and misses
Binding targets were first introduced in the 11th five-year plan, covering 2006-2010, mainly for non-economic policy areas, such as environmental protection and land management, to set out what was required from local governments.
Missed targets could dim career prospects, with indicators like energy consumption per unit of GDP included in the system used to assess performance of officials. Eight of the plan’s 22 targets were binding.
The central government carries out annual checks to make sure the plan’s delivery is on track, with the National Development and Reform Commission (NDRC) – the nation’s top economic planner – listing provincial authorities by their performance on key indicators.
China far surpassed the 11th plan’s GDP annual growth target of 7.5 per cent, with the economy recording an expansion of 11.2 per cent by 2010. But most of its environmental protection goals were missed. The worst-performing provinces were named and shamed by state media.
The next five-year plan’s environmental targets were also unfulfilled, but the gap was closing. By the end of the 13th plan, for 2016-2020, virtually all of its hard targets were met.
With the 14th plan drawing to an end this year on a note of fragile economic recovery – as well as the great uncertainties of the US trade war – it is still too early to judge the country’s performance in meeting its targets through the 2021-2025 period.
However, a midterm review released by the NDRC in late 2023 noted that progress towards 16 of the plan’s 20 major goals was within expectations or better than anticipated.
But the report also flagged that energy consumption, carbon emissions, air quality and childcare services targets were lagging.




Controversy
As a legacy of China’s planned economy, the five-year plans have been criticised for representing the rigidity of centralised governance. However, generally speaking, they have served as blueprints for the country’s great economic and social achievements.
The ruling party has also argued that the system includes soliciting views from different groups of people and accommodating their needs, so that it has learned to be flexible in adapting to changing internal and external environments.
The present five-year plan, with its focus on improving China’s hi-tech prowess and people’s livelihoods, had well-thought out targets, but its effectiveness was undercut by the retreat from liberal market-oriented reforms and the way policies were enforced, analysts said.
Months before China unveiled its national development strategy in 2020, an article in Washington-based magazine The Diplomat warned US policymakers of the implications of Beijing’s efforts to achieve technological self-reliance and advancement.
While it was not always successful, China had made enough progress to warrant Washington’s attention, according to the article, which questioned how the US should respond to the five-year plan.


Similar blueprints
With no opposition parties, the implementation of five-year or longer-term plans is easier for China compared to countries with multiple political entities.
The US federal government does not have an overall five-year plan as such, but the Pentagon and institutions tied to the government – the space agency Nasa, for example – have multi-year planning strategies that are not so different from the Chinese model.
Similarly, every five years the European Commission lays out its priorities on policies to maintain economic and social cohesion, as well as strengthen growth, employment, and living conditions throughout the bloc.
In its 2024-2029 priorities, the EC set goals to make business easier, put research and innovation at the heart of the economy, and tackle skills and labour gaps to meet significant challenges from rising costs of living and housing shortages to business and migration management.
Inspired by China’s success, many developing countries have followed Beijing’s lead and developed mid- to long-term planning strategies.
Some countries, including Poland, Ethiopia and Tanzania, have invited Chinese institutions to help with their planning consultations, according to Yin Jun, a researcher at Peking University, in his book A Review from the 1st to 14th Five-Year Plan.


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China

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The national strategic blueprint has evolved from its roots in a Soviet-style planned economy to today’s more responsive model


The national strategic blueprint has evolved from its roots in a Soviet-style planned economy to today’s more responsive model.


Russia

United States

Deng Xiaoping

Jiang Zemin

How did China’s 5-year plans deliver an economic miracle and what’s next?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The national strategic blueprint has evolved from its roots in a Soviet-style planned economy to today’s more responsive model

The national strategic blueprint has evolved from its roots in a Soviet-style planned economy to today’s more responsive model