Prior to the initiation of each of China's five-year plans, the Communist Party of China (CPC) Central Committee issues a set of recommendations to guide the plan's final formulation as well as its implementation. As the 15th Five-Year Plan (2026-30) begins next year, the 20th CPC Central Committee met to make and issue its recommendations at its fourth plenary session on October 20-23. One of the standout recommendations made by the committee was giving top priority to further modernizing China's industrial system. This is the first time the industrial system has been placed in such an important position.
A modernized industrial system provides fundamental support for a country's economic growth. Industrial systems vary from country to country. In the United States, for instance, the most developed sector of its industrial system is the financial services industry. China's modern industrial system has been developing rapidly since reform and opening up began in the late 1970s, with advantages of scale and a complete industrial system being formed. The country's comprehensive modern industrial system comprises 41 large industrial categories, 207 medium categories and 666 small categories, making it the only country in the world that has all the industrial categories in the UN's industrial classification system.
The added value of China's manufacturing industry accounts for approximately 30 percent of the global total, ranking first in the world for 14 years in a row. At the same time, the infrastructure that supports China's industries is also among the world's best. China has the world's most complete logistics infrastructure, having built the world's largest high-speed rail network, expressway network, postal and express delivery network, as well as world-class port clusters. It also has the world's largest information and communication network, ranking first globally in terms of the number of 5G base stations in operation and the number of mobile phone subscribers.
However, even with its advantages of scale and complete industrial system, China still faces many challenges in the continued modernization of its industrial system. For example, its manufacturing sector is large but not strong. It is the world's largest in scale, but lacks high-end capacity and has overcapacity in low-end industries. Key and core technologies lag behind the global leaders, with high dependence on foreign technologies in areas such as high-end chips, precise instruments and industrial software. Its position in the global value chain is relatively low, with weak brands and distribution channels. The proportion of processing trade remains high, limiting the potential for value-added growth. Addressing these shortcomings is the main task of modernizing the industrial system.
The 15th Five-Year Plan period is a crucial time for consolidating the achievements of recent decades and laying a solid foundation for the push toward the goal of basically achieving socialist modernization by 2035. The CPC Central Committee recommended prioritizing the modernization of the industrial system in order to strengthen the real economy and ensure industrial security. The real economy is an important pillar for the country's prosperity. China will adhere to the principle of revitalizing the nation through industry, focusing on intelligent and green development and building a modernized industrial system with advanced manufacturing as the backbone.
The digital, information-based and intelligent economic and industrial revolution has already begun. China holds a leading position in emerging industries and future sectors such as AI, robotics and clean energy. In recent years, a number of innovative hi-tech firms have emerged, leading industrial transformation. To maintain this advantage, China must continue to strengthen the building of a modernized industrial system.
Every major industrial transformation brings about a qualitative leap in productivity and has a significant impact on production and lifestyle, as well as economic and social development. At present, technological revolution is intertwined with major power competition. Hi-tech fields have become the main battlefield of international competition, profoundly reshaping the global order and development landscape. In this context, China must seize the historic opportunity presented by the new round of technological revolution and industrial transformation to accelerate the modernization of its industrial system.
Copyedited by G.P. Wilson
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