Statement on the Communique of the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China Go back »

2025-10-24 | All chapters

Background

The Fourth Plenum of the 20^th Central Committee of the Communist Party of China (CPC) took place in Beijing between 20^th and 23^rd October 2025, at which the CPC leadership deliberated on the 15^th Five-Year Plan (15FYP) – the blueprint for China’s economic and social development for the 2026-2030 period.

A communique published on the Plenum is available here. The full text of the 15FYP is expected to be released after the upcoming Two Sessions in March 2026.

In terms of content, the Communique noted that:

• “Ensuring both development and security” will be a guiding principle for the 15FYP, suggesting policy continuity with the principle of ‘coordinating development and security’, which was the highest level policy priority during the 14FYP period.
• Achieving “substantial improvements in scientific and technological self-reliance and strength” is to be a major task for the Chinese authorities over the next five years – in line with expectations that China will continue to advance self-reliance in areas deemed strategic.
• Under the 15FYP China will continue to boost domestic demand – partly by improving living standards.
• Modernising China’s industrial system, along with boosting the country’s strength in manufacturing, is to be emphasised during the 15FYP period, with it stated that, “The share of manufacturing in the national economy should be kept at an appropriate level, and a modernised industrial system should be developed with advanced manufacturing as the backbone.” The wording, in combination with the point on boosting domestic demand, suggests a recognition of the need to concretely address the current imbalance between supply and demand.
• ‘Common prosperity’, a Mao-era term that was revived by President Xi in 2021, before being de-emphasised in the intervening years as concerns over the COVID-19 pandemic came to the fore, is to be promoted. This suggests that there will be more of a focus during the 15FYP on policies that address inequalities, principally the disparity between rural and urban residents, and the need to re-distribute wealth in an attempt to boost consumption, especially among the lower middle class. It may also indicate that the Chinese Government will assert more control over economic resources and the distribution of wealth, particularly in the private sector.

Stance

The Communique’s content contains no major surprises andsignals that China’s 15^th Five-year Plan (FYP) will likely have a high degree of policy continuity following on from the 14FYP. Ensuring economic security—including via achieving a high degree of technological self-reliance in strategic sectors and by maintaining the country’s global manufacturing dominance—will continue to be a key priority for the Chinese authorities over the coming half a decade.

It is positive that the Communique outlined the need for the Chinese authorities to, “see that new demand drives new supply, that new supply helps create fresh demand, and that positive interactions are fostered between consumption and investment and between supply and demand.” A mismatch between supply and demand growth in China has led to persistent factory gate deflation and a need to export what the domestic market cannot absorb. Moreover, deflation, a depreciating renminbi against the euro and other currencies, as well as pressure to find markets abroad, have led to an increase in trade imbalances and predictable tension.

The European Chamber hopes this signals that during the 15FYP period, further policies aimed at stimulating domestic demand—which go beyond the scope of existing policies—will be introduced, and that rational supply growth will be ensured. The European Chamber has put forward its own recommendations for the 15FYP in its European Business in China Position Paper 2025/2026, which calls on Chinese policymakers to:

• fix the root causes of involution;
• provide a bigger role for the market to boost efficiency and eliminate waste;
• make trade make sense for its key partners;
• capitalise on China’s strength in green leadership; and
• ensure an open and inclusive digital transition.

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