China recently approved the new Five‑Year Plan (FYP), setting out its intent to continue moving towards a more resilient economy attuned to domestic and geopolitical conditions. The new plan presents a China more confident in its global role and in its industrial strengths rooted in clean technologies. At the same time, it does not yet fully reflect the scope of China’s climate and clean energy ambitions and capabilities. The challenge ahead will be for China to sustain its impressive growth in the clean economy while delivering on its promise to decarbonise at the pace and scale the world requires.
The FYP: Trends and takeaways
The FYP, which serves as the core policy blueprint for setting national priorities and guiding economic and social development every five years, has traditionally focused on domestic issues such as growth, welfare, stability and demographic pressures. Over time, it has also increasingly signalled China’s long‑term strategic direction to the world.
A growth model embedded in global demand and industrial policy
Underlying the 15th FYP is Beijing’s pledge to address China’s slowing economy by developing ‘new quality productive forces’, largely through ‘self-reliant’ efforts driven by continued industrial upgrading, energy system reform and expanded technological leadership. Although framed as an autonomous development model, it remains heavily reliant on external markets and access to resources. This suggests a transition from rapid expansion to slower, more mature growth, with greater emphasis on industrial resilience and technological sovereignty.
China’s industrial upgrading is moving beyond basic manufacturing catch‑up towards selective technological leadership. This is evident in major investment in areas of strategic importance to the country’s economic strength, including AI, advanced manufacturing and the ‘new three’, namely photovoltaic solar panels, lithium-ion batteries and electric vehicles.
A core feature of this shift is the integration of climate-related and clean energy technologies into national development priorities, making low-carbon industries an increasingly central part of the economic model.
Energy is a central organising principle of the plan, with emphasis on energy security and system stability.
- The strategy continues to prioritise the large-scale expansion of non-fossil power. It implicitly introduces a target of doubling non-fossil power capacity to around 4,700 GW by 2035, which would make a significant contribution to China’s 2035 Nationally Determined Contributions.
- Grid investment, transmission and energy storage are identified as system priorities, highlighting the need to incorporate variable renewables at scale.
- Yet, coal remains embedded in China’s energy strategy, suggesting it is still considered a strategic stabiliser and reliability tool. The 15th FYP does not set binding coal caps or near-term absolute emissions limits, keeping coal as a fallback option at the expense of China’s decarbonisation goals.
China’s new plan lowers the ambition of its climate target, while generally following existing long-term climate pledges. It does embed climate action in a broader strategy for energy security, industrial leadership in clean technologies, and power system transformation.
- It sets a target of a 17% reduction in CO₂ emissions per unit of GDP by 2030, compared with the 18% target in the previous plan. This adjustment still falls short of guaranteeing a near-term decline in absolute emissions. The new plan emphasises strengthening the ‘energy production, supply, storage, and marketing systems’ and ensuring the ‘safe and stable operation of power systems nationwide’. In practice, this could look like continued reliance on coal in both the energy generation and chemical sectors.
- It includes measures to enhance climate governance by improving greenhouse gas accounting methods, developing product-level carbon footprint standards, and establishing a national emissions factors database. It also outlines efforts to strengthen climate resilience, disaster prevention systems and biodiversity protection, reflecting a more coordinated approach to mitigation, adaptation and ecological governance.
The earlier planning cycle assumed continued deep integration with the global economic system. By contrast, the new plan reflects a more complex and fragmented landscape, positioning China as a more prominent pole in a multipolar order. It places greater emphasis on self-reliance while adopting a more forward-thinking approach to multilateral engagement and leadership across green, industrial, and digital domains, amid a more contested global environment and a fragile domestic economy.
Implications and tensions in China’s growth model
These trends create clear tensions. On the domestic front, questions remain over whether the export-led approach can continue to fuel the Chinese economy. Internationally, the model is increasingly viewed as straining the global economy, particularly where its spillover effects could be perceived as a form of geopolitical leverage. The EU, for instance, has raised concerns about its own economic security and growing supply chain vulnerabilities.
Meanwhile, emerging economies may benefit in the short term from access to affordable clean technologies and rapid infrastructure buildout. However, analysts warn that a persistent supply of low-priced Chinese products could constrain the development of local innovation ecosystems.
Furthermore, China’s advanced clean technology sectors, including renewables, batteries, electric vehicles and grid equipment, now operate at a scale that exceeds domestic needs. This brings strategic advantages but also presents challenges, since global markets may struggle to absorb such rapid expansion. China therefore faces a dual task of strengthening its position in key industries while addressing concerns about market balance and the sustainability of global supply chains.
Ambition, resilience and the realities of domestic constraints
Overall, the new plan marks a decisive shift away from earlier models: centred on rapid expansion and deep global integration towards resilience, technological self‑reliance, clean energy, and stronger geopolitical positioning. It outlines how China aims to navigate a slower‑growth environment while consolidating economic security and strategic influence. At the same time, tensions remain in how China approaches climate action, energy transition, and implementation at home and abroad.
These tensions highlight that, while progress on decarbonisation remains necessary, China views sustaining robust economic growth as an even greater priority – one that is fundamental not only to the country’s interests but also to the success of global climate action.
