Reuters Econ World China's five-year plan
Oct 22, 2025
Join Kevin Krolicki, Reuters Greater China bureau chief and expert on Chinese politics and economics, as he delves into China's upcoming five-year plan. He explains the evolution of these plans from strict quotas to broader social and environmental goals. Discover how domestic challenges, like falling home prices and oversupply, shape economic strategies. Kevin also discusses the political signals behind the plan, including its impact on trade and military leadership, revealing insights on China's position in global trade talks.
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Strategic Industries Vs. Consumption
- The plan will likely prioritize strategic industries: clean energy, robotics, AI and quantum.
- That focus competes with the need to revive household spending amid property-driven weakness.
When Targets Create Overcapacity
- Top-down targets can create oversupply and 'involution' where output rises but wages stagnate.
- Government-backed sectors often get more funding but also more non-performing loans and excess capacity.
Involution Explained
- 'Involution' describes rising output per unit but falling returns per worker, borrowed from 1960s anthropology.
- Chinese commentators use it to explain problems in crowded industries like electric vehicles.