What China's latest economic plans say about its tech ambitions and
rivalry with the US
[March 09, 2026] By
KEN MORITSUGU and CHAN HO-HIM
BEIJING (AP) — Two major economic plans unveiled at the annual meeting
of China's legislature outline top priorities that have different
ramifications for the global economy.
In the government plan for 2026, the No. 1 task is “building a robust
domestic market." Then comes accelerating technological progress. But
longer-term, a plan for the next five years gives more prominence to
achieving advances in tech.
The subtle difference highlights the government’s balancing act. Its
overarching goal is to transform from a low-cost manufacturing to a
tech-driven economy.
But a more immediate concern is dealing with a prolonged period of
sluggishness that has depressed consumer and business confidence. China
is such a large exporter that the choices it makes affect countries and
jobs around the world.
The plans, presented at the recent opening of the National People’s
Congress, offer a window into the government’s thinking. They are set to
be formally endorsed by the rubber-stamp legislature at the end of the
eight-day session on Thursday.
Tech crucial to China's future
Analysts believe technological prowess remains the far more important
goal for Chinese leader Xi Jinping and his vision to build the nation
into a major power that can contend with the United States on issues
ranging from trade to Taiwan tensions.
Speaking to a provincial delegation at the National People's Congress,
Xi called for new breakthroughs, original innovation and “seizing the
strategic high ground of science and technology,” according to a state
media report.
China's rapid growth into the world's second-largest economy has lifted
it to the level of a middle-income nation. To keep advancing, Xi has
promoted polices that move the economy into higher-value industries.
A government-backed push into electric vehicles, for example, has
transformed China into an emerging player in the global auto industry,
while dovetailing with national climate goals.
The five-year plan vows to “target the frontiers of science and
technology," speeding up development in areas such as artificial
intelligence, quantum technology, biotechnology and new energy.
Moves toward self-sufficiency
The push has expanded and morphed as technology has evolved into an area
of competition with the U.S. with national security implications.
The U.S. has restricted the access of Chinese companies to the most
advanced technologies, including semiconductors that drive AI. The
justification is that these parts can wind up in weapons at a time when
the two countries are military rivals as well.
China's government has responded by pouring resources into trying to
develop these components itself as well as engineer ways to remain
competitive with less advanced parts.
China must “fight the battle for key core technologies,” the five-year
plan said. Specific goals, apart from AI, electric vehicles and
robotics, include making advancements in semiconductors, batteries,
biomedicine and 6G mobile networks.
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A man pushes children in a cart at a mall in Beijing, Sunday, March
8, 2026. (AP Photo/Ng Han Guan)
 The plan also pledged to expand
production of China's homegrown passenger jet, the C919, and make
breakthroughs in developing its own commercial jet engine. The U.S.
temporarily cut off the supply of Western-supplied engines for the
C919 last year during an escalation in the trade war with China.
Rare earths — where China is the global leader — was highlighted as
an area where it should maintain its competitive edge as the U.S.
and other countries seek to develop their own supplies of the
critical elements for many advanced tech and military products.
Trump’s tariffs
Even as China's economy has cooled at home, rising exports have kept
it growing overall. But tariffs imposed by U.S. President Donald
Trump have exposed the risk of relying too heavily on overseas
markets.
China was able to shift exports to other markets, but that is facing
challenges as its record trade surplus of almost $1.2 trillion
raises alarm about the threat to factory jobs and the broader
economies in other countries.
That has added impetus to China's push to pump up consumer spending,
so the economy is less dependent on outside forces.
“Facing a complex and challenging international environment, we must
remain committed to the strategy of expanding domestic demand,” the
annual economic plan said.
But for all the strong words, analysts say the effort appears aimed
at keeping the economy afloat rather than boosting it. The annual
plan sets a growth target of 4.5% to 5% for 2026, leaving room for a
drop from last year’s 5% rise.
Meanwhile, the government is primed to offer huge subsidies for
high-tech advances in manufacturing, analysts said.
“Technological development and self-sufficiency remain central
priorities, and industrial policy will continue to be deployed as an
essential tool to achieve them,” economists at Capital Economics
wrote in a research note.
Similar subsidies to the wind and solar industries led to
manufacturing oversupply that was exported at rock-bottom prices,
undercutting overseas competitors. The end result could be an even
larger imbalance between China’s immense manufacturing capacity and
its weaker domestic demand, further driving up its exports.
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Chan Ho-him reported from Hong Kong.
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