WASHINGTON—Earlier this month, hundreds of Chinese officials filed into the Great Hall of the People in Beijing to approve the nation’s new five-year development plan. Rank-and-file delegates to China’s National People’s Congress sat down low, in a semicircle, gazing up at the main stage. Chinese President Xi Jinping sat center stage, well above the crowd, flanked by Communist Party leaders in a setting reminiscent of “The Last Supper,” Leonardo Da Vinci’s famous High Renaissance painting. On paper, the roughly three thousand delegates who attend this meeting from across the nation—representing every province and ethnic group and gazing up at the dais—have final say over policy. In reality, that group is a rubber stamp. The seating chart is designed to remind everyone where the real power lies: with Xi Jinping and the party leaders granted a seat up on the main stage.
Beijing holds these National People’s Congress meetings every spring. Every five years, the gathering signs off on a new five-year development plan. This year’s version is the fifteenth such plan issued since 1953, so Beijing refers to it as the fifteenth five-year plan. These plans signal how Beijing views the world, what their priorities are, and how they want the Chinese people to view their government and where the nation is headed. The meetings are highly scripted, and the plans are finalized well in advance. This year, Beijing crafted the political theatre to send a very clear top-line message: Everything is going according to plan. China is becoming a high-tech power on the world stage, the economy is moving toward higher-value-added growth, and the Chinese Communist Party is taking care of the Chinese people. To the extent that there are bumps in the road, that is due to China’s “external environment,” particularly the United States, which Beijing likes to paint as a global spoiler.
Those top lines are fairly consistent year-to-year. Beijing always uses these meetings to signal that everything is going according to plan. The details are where things get interesting. This year, five key signals stood out as particularly relevant to the United States and its allies.
1. China is doubling down on rare earths
Beijing has worked for decades to amass control over global critical mineral supply chains. In 2025, China used that control to pressure the Trump administration to back down on tariffs and other policies Beijing objected to. Now Washington—along with many of its allies—is working to undo that leverage. The Trump administration is investing billions to bring new rare earths production facilities online and reduce US dependence on China for the minerals.
But the new plan suggests China does not plan to stand idly by. Instead, Beijing is gearing up to bolster its dominance over those same supply chains. The new five-year plan states that China’s goal over the next five years is to “continuously strengthen [its] competitive advantages in rare earths, rare metals, and superhard materials.” It orders Chinese firms to move up the value chain. Chinese firms are already buying up the mines that produce these minerals in other nations, and they already send the material those mines produce to China for processing. Now Beijing wants the processed minerals to stay in-country to the extent possible, going into Chinese factories and making the global economy dependent on China not only for processed minerals but for the final products that contain them, as well. China already has that end-to-end dominance in rare earth magnets. Beijing wants to see that vertical control applied in other sectors.
Last fall, referring to US efforts to diversify these same supply chains to reduce Chinese control, US Treasury Secretary Scott Bessent stated that the United States is “going to go at warp speed over the next one to two years, and we’re going to get out from under this sword the Chinese have over us.” Beijing is signaling that it will be doing everything in its power to sharpen that sword and keep it exactly where it is.
2. Biotechnology is ascendant
Until now, leading on biotechnology innovation was a stretch goal for China. For example, the Made in China 2025 plan (the ten-year industrial policy blueprint issued in 2015) lays out concrete targets for Chinese firms to replace their foreign competitors across multiple sectors, but the goals for biotechnology were uniquely vague. That is changing. This new five-year plan lists eight frontier technologies targeted for breakthrough advancements. Of those, three are directly tied to biotechnology innovation: life science and biotechnology, brain science, and pharmaceutical innovation (the other five are artificial intelligence [AI]; quantum computing; nuclear fusion, deep sea, earth and polar exploration; and deep space exploration). The new plan details research and development priorities for each.
This is the first time a five-year plan has gone into such detail on biotechnology priorities. And for good reason. China is now the world’s primary destination for first-in-human trials, and US firms are paying record amounts for China’s biotechnology outputs. In 2024, US firms paid $52 billion in licensing fees for innovative Chinese drugs; in 2025, that number jumped to $137 billion.
The new plan indicates that Beijing is now ready to reduce the nation’s reliance on foreign firms. It calls for China to “build out a self-sufficient biotech ecosystem,” which is Beijing’s code for reducing China’s reliance on US and other non-Chinese firms. The plan also calls for tighter biological data regulations and for Chinese firms to maximize AI across this sector. Biotechnology has officially moved up to join the elite echelon of industries receiving Beijing’s priority attention and support.
3. The pace of exports will continue
During a press conference at the two sessions, Minister of Commerce Wang Wentao offered his view on China’s trade balance: “Exports and imports are like the two wheels on a car. The more balanced they are, the more steadily it runs, and the farther it goes.” Unfortunately for Wang, little about China’s current balance would suggest a smooth ride: The country’s exports are so excessive relative to its imports that this hypothetical car would likely drive in circles.
Domestic consumption accounts for less than 40 percent of China’s gross domestic product (GDP), nearly half the US number, which is around 70 percent of US GDP. Since Chinese consumers are not buying what Chinese factories produce, the nation is overly dependent on exports. That is disrupting global markets. In 2025, China’s total trade surplus with the rest of the world was $1.2 trillion, over 6 percent of its GDP. That surplus is due to China’s massive export volumes, which are threatening the economic security of many of its trading partners, putting firms out of business and triggering unemployment in those nations.
But Beijing is betting that its trading partners will fail to do anything about it. If the nations that absorb Chinese goods put real tariffs and other barriers in place to stem the flood of those imports, Beijing would be forced to reassess its entire economic model. It would be forced to do real rebalancing, boosting Chinese consumers to enable them to buy more of what the nation produces. The new plan gives no indication that this is on the horizon. Instead, Chinese leaders appear to be betting that the current global trade policy paralysis will continue through 2030.
4. AI-induced job loss remains a major blind spot
Beijing is taking a “move fast and break things” approach to AI deployment. Chinese leaders see AI as a ticket to achieving all of their major political priorities, from surveilling their citizens to achieving global technology leadership and generating new jobs at home. They are pushing to deploy it across the economy as quickly as possible to soak up every benefit AI can provide. Some of the risks from this approach recently played out across the nation when Chinese officials and consumers enthusiastically embraced OpenClaw personal AI assistants. Some local officials—desperate to show Beijing that they are using AI—offered more than one million dollars in grants to anyone developing new businesses based on OpenClaw. Soon the AI assistants were going rogue, running up large bills on consumers’ credits cards and sending their information to identity thieves. The Chinese government is now scrambling to put new guardrails in place.
With AI-induced layoffs and unemployment, the downside risks are much more serious and will be harder to rectify. Already, China is suffering high unemployment among its urban youth: nearly 20 percent are unemployed according to China’s official statistics. The real number is certainly higher. China’s official youth unemployment statistics were so poor in 2023 that Beijing stopped reporting them and revised its methodology to exclude some elements of the population, such as students.
Among the young people who do have jobs, a growing portion are gig workers, struggling to find full-time employment. The new five-year plan paints a rosy picture of AI boosting people’s livelihoods. For example, it calls for more AI use in elder care, classrooms, entertainment, and public services. But it does not acknowledge the likely job loss this will trigger for nurses, teachers, artists, and civil servants. It even pushes AI deployment in the very sectors where it is most likely to trigger job loss, such as using AI agents for personal assistants and AI-empowered robots for manufacturing.
The plan does include a nod to the potential for AI-induced job loss. For example, it calls for Chinese officials to set up “investigation and response mechanisms for the impact of AI on employment” and provide “employment stability guarantees, re-employment training, and employment support” for workers who lose their jobs to AI. But this amounts to just a few sentences of generalities. In contrast, biotechnology is referenced across multiple chapters, with incredibly specific goals. Beijing does not yet seem to view AI deployment as a serious employment challenge. That is a major blind spot.
5. China aims to become the world’s biggest R&D funder
The new five-year plan calls for the Chinese government to keep research and development (R&D) spending growing at least 7 percent per year over the next five years. That means China’s national labs, universities, and industrial clusters will be flush with cash at a time when the United States is slashing those same budgets. As a result, new analysis in the journal Nature predicts that China’s public spending on research and development could surpass US spending by 2029. China is attempting to utilize this spending gap to leap ahead of the United States in “frontier science” and breakthrough technologies in critical sectors such as AI, quantum computing, and biotechnology.
In the fourteenth five-year plan (2020-2025), Beijing focused primarily on commercial technology such as semiconductors, electric vehicles, and information and communication technologies. This new plan is aiming higher. It calls for Chinese firms to move the competition up the value chain to innovation in “future industries” or “frontier industries” that are not yet fully commercialized. It calls for Chinese firms to replace foreign competitors as the leading intellectual-property generators, reducing China’s reliance on the United States and boosting the nation’s “self-reliance.” Beijing is betting that US efforts to cut federal R&D spending are China’s big opportunity to surpass the United States as the world’s leading science and technology innovator. Chinese leaders do not plan to stand idly by and let that opportunity go to waste.