On Thursday (23 October), China’s Communist Party concluded its annual four-day gathering of top leaders to determine policy goals for the new Five-Year Plan (2026-2030), which will be introduced next March. Early rumours have European policymakers worried.
During the closed-door meeting, the 370-person Central Committee, made up of party leaders, provincial governments, the military and state-owned businesses, discussed the policy directions of the Communist Party (CCP) for the second half of the decade.
Xi Jinping, the CCP’s General Secretary and the country’s president, is said to be personally involved in the plan, receiving feedback from the general public, party members, academics and economists since May. Mr Xi reinforced China’s existing economic path, emphasising “new-quality productive forces,” a previously introduced slogan that blends industrial policy, national security and ideology.
A state minister affirmed that China “will accelerate the building of a modernised industrial system based on advanced manufacturing”, focusing on the research, development and rollout of strategic technologies, such as semiconductors, batteries, quantum science, electric road transport and AI, areas where China increasingly becomes self-reliant.
Mr Xi and the party leadership hope this will ease the persistent deflation and weak domestic demand, while avoiding too much consumerism and “welfarism,” policies Xi associates with Western weakness.
Yet, Mr Xi also sees the benefit of flooding world markets with cheap cars, batteries, and critical raw materials. Artificially-low prices make it impossible for foreign competitors to produce on market terms, locking global businesses into reliance on China. This week’s meeting produced no signs of this strategy easing anytime soon, especially while engaging in a trade war with the US.
A renewed China strategy in Europe?
Meanwhile, European leaders worry. Hopes that economic and diplomatic engagement with China would balance trade have faded. Instead, EU officials now warn of “unfair trade practices” as a platform for discussing Beijing’s industrial overcapacity and dumping on the EU’s internal market. Commission President Ursula von der Leyen said this week that the EU would “accelerate what we have already put in motion” to protect Europe’s economic security, from critical minerals to strategic technologies.
Although China will not be mentioned by name in Thursday’s EU summit conclusions, draft conclusions urge the Commission to “make effective use” of the bloc’s economic security tools to counter unfair competition. Moreover, France, Poland and Germany plan to raise the issue of Chinese export controls on critical minerals, news organisation POLITICO reports.
At the end of 2023, the Anti-Coercion Instrument came into force. It allows the EU to impose sanctions like asset freezes or trade restrictions on countries or companies that try to pressure EU member states. It has yet to be used, but some argue the time may have come.
