By Dilin Wu, Research Strategist at Pepperstone
China’s Fourth Plenum and the new 15th Five-Year Plan point to a clear strategic shift, emphasizing priorities that will shape the country’s economic trajectory for years to come.
First, technology self-reliance is front and center. Both the Plenum and the plan stress reducing dependence on foreign tech and building domestic strategic industries. This is a long-term positive for China’s tech and high-end manufacturing sectors, and it reinforces the “AI chip domestic substitution” story in Hong Kong and mainland equities.
Second, domestic demand and the ‘internal circulation’ are being approached cautiously. Authorities signal tools exist to support consumption, but no large-scale, immediate stimulus is planned. Growth is being steered toward resilience rather than short-term expansion, meaning short-term consumer spending is unlikely to move markets materially.
Third, execution and political risks remain. Stronger governance and oversight aim to ensure stability, but they may generate short-term volatility in sectors reliant on government approvals or contracts.
Compared with the previous Five-Year Plan, this iteration is about building toughness and resilience rather than chasing headline growth, taking a more strategic, long-term approach that integrates green development, domestic stability, and reduced vulnerability to external shocks.
Overall, the plan suggests mid- to long-term investors should favor companies benefiting from tech self-reliance, local supply chain development, and green initiatives, while markets should watch for short-term swings tied to policy timing, regulatory updates, and SOE reform.