China has opened a new five-year cycle

The Chinese government work report, presented by Premier Li Qiang at the National People's Congress on March 5, 2026, is more than just an annual report. It is simultaneously a summary of the year 2025, a political and economic assessment of the completed 14th Five-Year Plan, a programmatic introduction to the 15th Five-Year Plan (2026–2030), and a detailed action plan for 2026. The document describes China as a country that has entered a new development cycle under pressure from external shocks, but without abandoning its ambitions: to maintain growth, deepen technological independence, expand the domestic market, maintain social stability, mitigate risks in real estate and finance, and continue opening up to the outside world on its own terms.

The political tone is set at the very beginning of the report. The year 2025 is called "truly remarkable": China emphasizes that the CPC Central Committee formulated a new five-year development guideline, the country celebrated the 80th anniversary of the victory in the War of Resistance against Japanese Aggression and World War II, and established Taiwan Recovery Day. The report presents these events not as historical backdrops but as part of a mobilization agenda that strengthens national spirit, patriotism, and domestic consolidation.

2025: Resilience Under Pressure
The economic section begins by asserting that the Chinese economy has maintained resilience "in the face of headwinds." GDP in 2025 grew by 5% to 140.19 trillion yuan. 12.67 million new jobs were created in cities, the average surveyed urban unemployment rate was 5.2%, and foreign trade maintained rapid growth while promoting export diversification and maintaining a basic balance-of-payments equilibrium. The report specifically emphasizes that personal incomes grew in sync with the economy, the results of the fight against poverty were consolidated, 14 million children benefited from the one-year free preschool education policy, and over 30 million children under three were covered by the national childcare subsidy program. The grain harvest reached 715 million tons.

The document also lists signs of what China views as a transition to "new high-quality productive forces." For 2025, Beijing announced breakthroughs in AI, biomedicine, robotics, quantum technologies, and chip development. Symbolic achievements include the Tianwen-2 interplanetary mission, the expanded use of the BeiDou satellite system, the start of construction of the Yarlung Tsangpo River hydroelectric project, the commissioning of the Fujian aircraft carrier with an electromagnetic catapult, and the promotion of Chinese large-scale AI models as the core of the global open-source ecosystem. Meanwhile, the added value of high-tech manufacturing grew by 9.4%, equipment production by 9.2%, industrial robot production by 28%, integrated circuit production by 10.9%, production of new energy vehicles exceeded 16 million units, and the number of charging stations reached 20 million. GDP energy intensity decreased by 5.1%.

However, the triumphant tone does not negate the acknowledgment of problems. The report explicitly states that the international trade and economic environment has sharply worsened due to a surge in unilateral measures and protectionism, fluctuating expectations, and pressure on China's foreign trade. Domestically, the government acknowledges that structural problems have worsened, while consumption and investment have suffered from a lack of momentum. Importantly, the report specifically mentions five rounds of Sino-US trade negotiations and the agreements reached at the summit of the two countries' leaders in Busan, which are presented as factors stabilizing Sino-US trade and economic cooperation.


What exactly did the government do in 2025?
The report examines seven areas of government work in 2025.
First, China pursued a more active fiscal policy and a relatively accommodative monetary policy. Government spending was increased, interest rates and reserve requirements were reduced, and trade-in programs for consumer goods were expanded, generating over 2.6 trillion yuan in sales, with total retail trade volume exceeding 50 trillion yuan. Support for major national security strategies and projects was stepped up to attract investment; investment in equipment purchases increased by 11.8%. At the same time, the government continued to stabilize the real estate market by regulating land supply, easing restrictions on housing transactions, and reducing mortgage rates for housing funds. The report states that the goal of timely delivery of housing projects was achieved across the board. Concurrently, measures were taken to stabilize the stock market, reduce the hidden debt of local governments, and reduce the number of high-risk regional financial institutions.

Second, China strengthened its innovation and industrial agenda. R&D spending reached 2.8% of GDP, technology contracting volume increased by 10.8%, 583 national standards were revised or adopted in key areas, and the development of the digital economy accelerated to the point that the added value of its core industries exceeded 10.5% of GDP. The promotion of the AI Plus initiative and the digital transformation of manufacturing were emphasized.

Third, the government deepened reform and opening up. It promoted the creation of a unified national market, updated the market access "negative list," combated destructive competition, expanded state-owned enterprise reforms, and encouraged private investment. Exports grew by 6.1% year-on-year, and the number of new foreign-invested enterprises increased by 19.1%. Pilot free trade zones were promoted, a special island-wide customs regime was launched at the Hainan Free Trade Port, and high-quality construction of the Belt and Road Initiative (BRI) continued. At the same time, Beijing expanded both unilateral visa-free travel and reciprocal visa waivers.

Fourth, China promoted urbanization and rural revitalization. The proportion of permanent urban residents reached 67.9%, urban renewal continued, and the number of employed people previously lifted out of poverty remained above 30 million.

Fifth, social programs were expanded. The government strengthened employment support, promoted education reform, and developed community-based healthcare, including pediatrics and mental health. The text notes that pediatric services were extended to all public level II and III general hospitals, and long-term care systems covered 300 million people. A gradual increase in the retirement age was also introduced, basic pensions for rural and non-working urban residents were increased by 20 yuan per month, a private pension system was implemented nationwide, and elderly care vouchers were piloted. Tourism and the cultural industry also grew: domestic tourist arrivals increased by 16.2% and inbound arrivals by 17.1%.

Sixth, Beijing emphasized its environmental and low-carbon agenda. The average PM2.5 concentration in cities decreased by 4.4%, the share of good-quality surface water reached 91.4%, and the share of non-fossil energy in total consumption reached 21.7%. Pilot zones of the Beautiful China initiative were launched, and the first group of new energy bases in desert areas was commissioned. The capacity of new types of energy storage exceeded 130 GW. China also announced its nationally determined contribution (NDC) for climate change for 2035.

Seventh, the government spoke of strengthening its own efficiency, combating formalism, corruption, and lawlessness, improving administrative services, and enhancing the quality of local governance. Thirteen legislative initiatives were submitted to the NPC Standing Committee, 30 administrative regulations were revised or adopted, and the number of industrial accidents decreased by 8.7%. The report emphasizes the development of a "peaceful China," the strengthening of national security, and the intensification of the fight against crime. In foreign policy, 2025 is presented as a year of promoting "big-country diplomacy with Chinese characteristics": the China-Central Asia Summit, the APEC meeting, the BRICS virtual summit, the G20 summit, the SCO summit in Tianjin, the meeting of world leaders on women's rights, and the China-CELAC forum are all mentioned. China positions itself as an opponent of protectionism and "unilateral bullying," a defender of multilateralism, and the initiator of the Global Governance Initiative.

Results of the Entire 14th Five-Year Plan
Following the annual review, the report expands its scope and summarizes the entire 14th Five-Year Plan. The objective here is not simply to highlight achievements through 2025 but to legitimize a new development cycle. The document states that over the five years, China's economy successively exceeded the benchmarks of 110, 120, 130, and 140 trillion yuan, with an average annual growth rate of 5.4%, which, it emphasizes, is above the global average. National R&D expenditure grew by an average of 10% per year, the number of high-value patents per 10,000 people reached 16, and China's manufacturing industry maintained its global leadership in added value for 16 consecutive years. At the same time, all restrictions on foreign investment in the manufacturing sector were lifted, China's status as the world's largest commodity trader was cemented, incomes rose, jobs were created, life expectancy increased to 79.25 years, and the average years of schooling for the working-age population reached 11.3 years. The proportion of days with good or excellent air quality in cities rose to 89.3%, forest cover exceeded 25%, and China declared itself the country with the largest and fastest-growing renewable energy system. The government declared that all 20 key targets, 17 strategic tasks, and 102 major projects of the 14th Five-Year Plan had been achieved.

But the report goes beyond self-congratulation. It acknowledges rising geopolitical risks, a weakening global economy, pressure on the multilateral trading system, the difficulty of transitioning to new growth drivers, an imbalance between strong supply and weak demand, problems facing enterprises, difficulties with employment and income growth, budgetary stress for local governments, a protracted real estate market adjustment, and shortcomings in public services. It also mentions problems within the governance system itself: not all measures have produced the expected results, some officials are failing to deliver on high-quality development goals, and there is window dressing, bureaucracy, and corruption. Nevertheless, the overall conclusion of the report is clear: despite the risks, the long-term trend of Chinese development has not changed.

Gulnara Safarli
Continued in Part Two

SR-CENTER.INFO