China vows to double down on tech self-reliance as US rivalry heats up
China’s top leaders have vowed to double down on making the country technologically self-sufficient, a policy priority that has taken on more urgency as the rivalry with the U.S. intensifies.
China’s top leaders have vowed to double down on making the country technologically self-sufficient, a policy priority that has taken on more urgency as the rivalry with the U.S. intensifies.
The elites of China’s ruling party set out the goal in a communique issued after a four-day political gathering centered around charting the course for the world’s second-largest economy over the rest of the decade.
China will aim to “significantly improve" its autonomy in technology over the next five years, officials said after the high-level meeting—known as the fourth plenum—wrapped up Thursday.
The readout of the closed-door conclave also included a pledge to step up high-end manufacturing, another measure viewed as part of Beijing’s efforts to hold its own against the U.S.
As China’s population shrinks and ages, Beijing is betting on leapfrogging technological advance and innovation to boost productivity. Policymakers are increasingly seeing technological prowess as key to national security as geopolitical tensions rise.
Other key targets in the new five-year policy blueprint included forging a unified national market, bolstering domestic consumption, improving social welfare and modernizing the armed forces.
China watchers will scrutinize the communique for signs that Beijing will take meaningful steps to pivot the economy to consumption-led growth, but a detailed action plan will only be released next March after Chinese lawmakers formally approve it.
Officials at the meeting stressed that they will aim to achieve China’s main economic and social targets for the year, suggesting that Beijing remains determined to hit the annual goal of around 5% growth in gross domestic product.
They also pledged to step up policy support for the economy when necessary.
Despite solid economic growth in the third quarter, Beijing will have to face reality, Nomura analysts say.
“Growth headwinds have been building up and will almost surely strengthen in 4Q," Ting Lu and others wrote in a note.
The tailwinds that buoyed growth in the prior quarter were stock trading and exports, which may not be sustainable, as China’s markets tend to be cyclical and escalating trade tensions will eventually bite, they said.
Meanwhile, deflation persists, consumption is weak and the property sector has shown no signs of stabilization.
In Nomura’s view, Beijing’s best bet is to resist the temptation to fuel the stock markets with very high-profile monetary measures, focusing instead on cleaning up the property mess, and addressing deep-rooted problems like inequality in the social security system.
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