China – Macro view
Latest Five-Year Plan Says It All
China is focusing on technology and sustainability
China issued the outline of its 14th Five-Year Plan (FYP) at the end of october. Even if no specific numerical targets have yet been given, it is stated that China is set to “achieve socialist modernization” by 2035 and to reach that goal, China is focusing on sustainability and technology.
- Economic transformation from high growth to sustainable high-quality growth.
- Innovation, self-sufficiency in core technologies, and greener economy are ”strategic pillars” for its future economic development.
The key word in the FYP, “Dual Circulation” implies boosting the economy’s internal circulation by making domestic production and consumption the main engines of growth with external foreign investments playing only a supportive role.
- Tax breaks, investments and incentives are likely to be offered to local companies in key sectors such as semiconductors, AI, data centers, biotech, renewables, etc.
- Increase in domestic demand will drive infrastructure and R&D spending from both private and public sector towards healthcare and sustainable technologies.
A shift towards China’s domestic players
As China implements its FYP, domestic players will be the greatest beneficiaries as the trend towards a more leveled global playing field intensifies.
- Domestic players are likely to outpace most western players exposed to the Chinese market.
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