October 17, 2025 • 8 mins
China's top policymakers are finalizing their next five-year plan for the country, for the period from 2026-2030. It's a blueprint for economic and social development at a time when Beijing is facing a myriad of challenges at home and abroad. Jenni Marsh, who leads Bloomberg's team covering China's economics and government, joins host Stephen Carroll to discuss.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. I'm Stephen Carol and
this is Here's Why, where we take one new story
and explain it in just a few minutes with our
experts here at Bloomberg. A difficult situation in China, the economy.
(00:22):
I still think actually for next year, the focus is
going to be on the five year plan. The growth is.
Speaker 2 (00:27):
Still very, very unbalanced. A year later, we're still now
debating whether you're going to need another policy support.
Speaker 1 (00:33):
Going into September, pol of Bureau meeting demand side is
not doing very well. Not for the first month. This
is already the fourth month we're talking about. They are
actually quite happy with how their economy performed in the
first half of last year, but they know that the
consumer stimulus that they employed can't be effective forever.
Speaker 2 (00:50):
Washington is dealing with a much more assertive Beijing. We
think it's the defining conflict of this generation.
Speaker 1 (00:58):
The Chinese economy is facing a host of challenges, and
Beijing has a plan, or at least it will. The
country's next five year Plan will chart a path for
China's economic and social development from twenty twenty six to
twenty thirty, and it's a strategy that has global consequences.
Here's why China's next five year plan matters for the world.
(01:21):
Jenny Marsh, who leads Boomberg's team covering China's economy and government,
joins me now for more. This plan is going to
be finalized at an upcoming meeting of policymakers, the so
called Fourth Plenum. What's the economic context that they'll have
in mind.
Speaker 2 (01:36):
Well, since China made its last five year plan, a
lot has happened. Obviously, we've had the pandemic, which just
sort of upending global supply chains, and ever since then,
the Chinese economy has really just feel on shaky ground.
It's a property crisis. Now it's just grinding on. It's
been years. China's battling entrenched deflation, looking at its third
(01:58):
year of fulling prices across the economy this year. Its
companies are sort of locked in these price wars, which
is hurting their bottom lines and affecting job growth. And
of course you know now they're in a trade war
as well. So the one thing that's going right for
the Chinese economy, which is exports, are under a lot
of pressure now politically from the US, but also other countries.
(02:20):
So they go into this meeting with a lot of
problems to solve.
Speaker 1 (02:24):
So just remind us what sort of policies have gone
into previous five year plans.
Speaker 2 (02:30):
So China adopted this model from the Soviet Union and
ever since then they have to sort of emulate that
system every five years. And in the beginning it was
sort of very detailed specific targets. But since the beginning
of this century, rather than setting such detailed targets, they've
shifted into this mode of focusing on broader tasks and objectives.
(02:50):
The last five year plan was significant because they moved
away from setting a specific growth target, which they used
to do, and now it's much more about being a
broader around the growth target and sort of saying that,
you know, they're looking for a high growth environment or
that kind of thing, but we're not gonna get a
specific number in the way that we used to. But
(03:13):
for example, in the last five year Plan, there's that
this long term target of basically achieving socialist and modernization
by twenty thirty five. So that's quite vague, typically like
communist party sort of term, but it translates to things
like significant gains in GDP technological innovation, increasing in plak
cappita income and the size of the middle income group
(03:34):
in China. These are the sort of things we've seen
in the past.
Speaker 1 (03:38):
How does this plan get drawn up? What's the process?
Speaker 2 (03:41):
It is a months long process, and the contributors even
include choosing Ping himself, who back in April convened a
seminar in Shanghai with provincial governors where he gets input.
According to state media, at least the central government invites
the public to submit suggestions through a website, and then
top policymakers in the polyp Bureau huddle behind closed doors.
(04:04):
We've seen hints on the polet Bureau the meetings. They've
talked about developing new productive forces, tech innovation, scientific expansion.
But by the time I get to this planum, everything
is decided. And so it's a four day meeting where
they're going to sort of talk about things, but really
by the time they get there, it's all written down
and they're kind of got in the eyes and crossing
(04:25):
the t's.
Speaker 1 (04:26):
So what do we know then about what might be
in this upcoming plan.
Speaker 2 (04:29):
We do know that the government is considering a new
version of She's made in twenty five campaign, and that
focused on making a China a leader in high tech goods.
So we had a scoop about that back in May,
and that's one of the key things we'll be looking
out for Made in twenty twenty five is this sort
of idea of made in China is bringing high tech
(04:50):
sort of goods to Chinese production, moving up the value chain,
and so this is central to China's ambition to take
on the US in areas from chip design all the
way through to aviation. We will look out for the
language around growth. They're going to have to address the
fallout from the property market collapse, which is now dragging
on twenty twenty one. There's rising youth unemployment. There could
(05:13):
be policies to target that, and we think as well,
inclusive growth is going to be a big thing for
social stability, so that's expanding the social welfare net, so
policies indicating they're going to do more for pension provision
for people with families. At that symposium in April that
she hosted, they did say that this plan should stabilize employment,
(05:35):
the business environment, and market expectations. So these are sort
of some of the breadcrumbs that we have so far.
Speaker 1 (05:41):
Should we expect to hear more about China's trade policies
given the ongoing tensions with the US.
Speaker 2 (05:47):
I think that yes, But indirectly, this kind of a
broad policy document probably won't mention the US by name.
It won't address such current issues, but of course it
will lay out priority use in the industrial sector, and
it will talk about how China wants to shape its
economy in the next five years. We expect there's going
to be a shift to domestic services, prioritizing those. You know,
(06:11):
when it comes to consumption, China's goods consumption is actually
very strong on par with other developed countries in the
US economy, but when it comes to service consumption, that's
quite weak. And so that matters for the US because
they really want China to try to rebalance their economy
to be less reliant on exporting and more dependent on
(06:31):
the domestic consumer. The policies in this document are going
to be very much of interest to the US, and
that have ramifications for China's global trade relationship.
Speaker 1 (06:41):
What else should we look out for in terms of
what's in this plan that might affect countries elsewhere in
the world.
Speaker 2 (06:48):
I think it's really going to be about. I suppose
the tone that China takes to the rest of the world.
Are they talking about sort of embracing the systems that
we already have in terms of the UN and the
wto more signs that China wants to maintain the status quo.
And then I really think it's this idea of rebalancing.
Scott percent has already specifically said he is looking to
(07:08):
the five year Plan and he has asked Chinese officials
to write this plan with a view to rebalance the
Chinese economy away from flooding global markets. And that's a
concern not just for the US, but for Europe. Even
friendly countries in Latin America such as Brazil have been
raising concerns about this. So I think a lot of
(07:30):
people are going to want to see efforts to get
the Chinese consumer spending. China has one point four billion people.
Why does it need to rely on the rest of
the world to buyas products? I think that probably is
the thing. From an international perspective, foreign governments will be
really looking.
Speaker 1 (07:44):
Towards Okay, we'll be watching out to see what indications
we might get. Jenny Marsh leading our team covering China's
economy and government. Thank you. For more explanations like this
from our team of three thousand journalists and analysts around
the world, go to Bloomberg dot com slash explainers. I'm
Stephen Carol. This is here's why. I'll be back next
week with more. Thanks for listening.
Bloomberg Audio Studios, Podcasts, radio News. I'm Stephen Carol and
this is Here's Why, where we take one new story
and explain it in just a few minutes with our
experts here at Bloomberg. A difficult situation in China, the economy.
(00:22):
I still think actually for next year, the focus is
going to be on the five year plan. The growth is.
Speaker 2 (00:27):
Still very, very unbalanced. A year later, we're still now
debating whether you're going to need another policy support.
Speaker 1 (00:33):
Going into September, pol of Bureau meeting demand side is
not doing very well. Not for the first month. This
is already the fourth month we're talking about. They are
actually quite happy with how their economy performed in the
first half of last year, but they know that the
consumer stimulus that they employed can't be effective forever.
Speaker 2 (00:50):
Washington is dealing with a much more assertive Beijing. We
think it's the defining conflict of this generation.
Speaker 1 (00:58):
The Chinese economy is facing a host of challenges, and
Beijing has a plan, or at least it will. The
country's next five year Plan will chart a path for
China's economic and social development from twenty twenty six to
twenty thirty, and it's a strategy that has global consequences.
Here's why China's next five year plan matters for the world.
(01:21):
Jenny Marsh, who leads Boomberg's team covering China's economy and government,
joins me now for more. This plan is going to
be finalized at an upcoming meeting of policymakers, the so
called Fourth Plenum. What's the economic context that they'll have
in mind.
Speaker 2 (01:36):
Well, since China made its last five year plan, a
lot has happened. Obviously, we've had the pandemic, which just
sort of upending global supply chains, and ever since then,
the Chinese economy has really just feel on shaky ground.
It's a property crisis. Now it's just grinding on. It's
been years. China's battling entrenched deflation, looking at its third
(01:58):
year of fulling prices across the economy this year. Its
companies are sort of locked in these price wars, which
is hurting their bottom lines and affecting job growth. And
of course you know now they're in a trade war
as well. So the one thing that's going right for
the Chinese economy, which is exports, are under a lot
of pressure now politically from the US, but also other countries.
(02:20):
So they go into this meeting with a lot of
problems to solve.
Speaker 1 (02:24):
So just remind us what sort of policies have gone
into previous five year plans.
Speaker 2 (02:30):
So China adopted this model from the Soviet Union and
ever since then they have to sort of emulate that
system every five years. And in the beginning it was
sort of very detailed specific targets. But since the beginning
of this century, rather than setting such detailed targets, they've
shifted into this mode of focusing on broader tasks and objectives.
(02:50):
The last five year plan was significant because they moved
away from setting a specific growth target, which they used
to do, and now it's much more about being a
broader around the growth target and sort of saying that,
you know, they're looking for a high growth environment or
that kind of thing, but we're not gonna get a
specific number in the way that we used to. But
(03:13):
for example, in the last five year Plan, there's that
this long term target of basically achieving socialist and modernization
by twenty thirty five. So that's quite vague, typically like
communist party sort of term, but it translates to things
like significant gains in GDP technological innovation, increasing in plak
cappita income and the size of the middle income group
(03:34):
in China. These are the sort of things we've seen
in the past.
Speaker 1 (03:38):
How does this plan get drawn up? What's the process?
Speaker 2 (03:41):
It is a months long process, and the contributors even
include choosing Ping himself, who back in April convened a
seminar in Shanghai with provincial governors where he gets input.
According to state media, at least the central government invites
the public to submit suggestions through a website, and then
top policymakers in the polyp Bureau huddle behind closed doors.
(04:04):
We've seen hints on the polet Bureau the meetings. They've
talked about developing new productive forces, tech innovation, scientific expansion.
But by the time I get to this planum, everything
is decided. And so it's a four day meeting where
they're going to sort of talk about things, but really
by the time they get there, it's all written down
and they're kind of got in the eyes and crossing
(04:25):
the t's.
Speaker 1 (04:26):
So what do we know then about what might be
in this upcoming plan.
Speaker 2 (04:29):
We do know that the government is considering a new
version of She's made in twenty five campaign, and that
focused on making a China a leader in high tech goods.
So we had a scoop about that back in May,
and that's one of the key things we'll be looking
out for Made in twenty twenty five is this sort
of idea of made in China is bringing high tech
(04:50):
sort of goods to Chinese production, moving up the value chain,
and so this is central to China's ambition to take
on the US in areas from chip design all the
way through to aviation. We will look out for the
language around growth. They're going to have to address the
fallout from the property market collapse, which is now dragging
on twenty twenty one. There's rising youth unemployment. There could
(05:13):
be policies to target that, and we think as well,
inclusive growth is going to be a big thing for
social stability, so that's expanding the social welfare net, so
policies indicating they're going to do more for pension provision
for people with families. At that symposium in April that
she hosted, they did say that this plan should stabilize employment,
(05:35):
the business environment, and market expectations. So these are sort
of some of the breadcrumbs that we have so far.
Speaker 1 (05:41):
Should we expect to hear more about China's trade policies
given the ongoing tensions with the US.
Speaker 2 (05:47):
I think that yes, But indirectly, this kind of a
broad policy document probably won't mention the US by name.
It won't address such current issues, but of course it
will lay out priority use in the industrial sector, and
it will talk about how China wants to shape its
economy in the next five years. We expect there's going
to be a shift to domestic services, prioritizing those. You know,
(06:11):
when it comes to consumption, China's goods consumption is actually
very strong on par with other developed countries in the
US economy, but when it comes to service consumption, that's
quite weak. And so that matters for the US because
they really want China to try to rebalance their economy
to be less reliant on exporting and more dependent on
(06:31):
the domestic consumer. The policies in this document are going
to be very much of interest to the US, and
that have ramifications for China's global trade relationship.
Speaker 1 (06:41):
What else should we look out for in terms of
what's in this plan that might affect countries elsewhere in
the world.
Speaker 2 (06:48):
I think it's really going to be about. I suppose
the tone that China takes to the rest of the world.
Are they talking about sort of embracing the systems that
we already have in terms of the UN and the
wto more signs that China wants to maintain the status quo.
And then I really think it's this idea of rebalancing.
Scott percent has already specifically said he is looking to
(07:08):
the five year Plan and he has asked Chinese officials
to write this plan with a view to rebalance the
Chinese economy away from flooding global markets. And that's a
concern not just for the US, but for Europe. Even
friendly countries in Latin America such as Brazil have been
raising concerns about this. So I think a lot of
(07:30):
people are going to want to see efforts to get
the Chinese consumer spending. China has one point four billion people.
Why does it need to rely on the rest of
the world to buyas products? I think that probably is
the thing. From an international perspective, foreign governments will be
really looking.
Speaker 1 (07:44):
Towards Okay, we'll be watching out to see what indications
we might get. Jenny Marsh leading our team covering China's
economy and government. Thank you. For more explanations like this
from our team of three thousand journalists and analysts around
the world, go to Bloomberg dot com slash explainers. I'm
Stephen Carol. This is here's why. I'll be back next
week with more. Thanks for listening.
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