China Prioritizes Tech Self-Reliance in New Five-Year Plan Amid US Semiconductor Controls

Beijing Outlines Ambitious Tech Independence Goals

The Chinese Communist Party (CCP) has officially declared technological self-reliance as a cornerstone of its forthcoming 15th Five-Year Plan (2026-2030). This strategic directive, announced following a four-day conclave of the Party's Central Committee, underscores Beijing's intensified commitment to bolster its domestic capabilities in critical high-tech sectors, most notably semiconductors and artificial intelligence (AI). The move is widely seen as a direct countermeasure to the increasing export controls imposed by the United States on advanced technologies.

State broadcaster CCTV reported that the proposal emphasizes 'high-quality development' and the cultivation of 'new-quality productive forces' through technological advancement. This renewed focus aims to reduce China's vulnerability to geopolitical shifts and external risks, supporting its long-term ambition to become a global industrial powerhouse.

Strategic Imperative for Domestic Innovation

The drive for technological independence is not new, but it has gained significant urgency due to persistent US restrictions on China's access to advanced technology. The CCP's blueprint for 2026-2030 pledges to build a 'modern industrial system' and accelerate self-reliance across various advanced technologies, including quantum information, integrated circuits, brain science, and space technology, in addition to semiconductors and AI.

This strategy reflects President Xi Jinping's broader vision of national rejuvenation through technological and economic independence. By emphasizing self-sufficiency, Beijing aims to insulate its economy from foreign pressures and foster sustainable growth, particularly amid slowing economic growth and efforts to boost domestic demand.

The Semiconductor Battleground

The semiconductor industry remains a primary battleground in the ongoing technology competition. The US has implemented extensive export controls, targeting China's ability to access and develop advanced computing and semiconductor manufacturing items. These measures restrict the export of cutting-edge chip-making equipment, critical software, and even limit the ability of US persons to work in Chinese semiconductor facilities.

These restrictions, which began to escalate significantly in 2022, aim to curb China's advancements in areas that could enhance its military or surveillance capabilities. While these controls have disrupted China's chip industry in the short term, they have also paradoxically galvanized Beijing's industrial policy, compelling Chinese companies to accelerate efforts in developing domestic alternatives and strengthening their own supply chains.

Investment and Future Outlook

To achieve its ambitious goals, China has channeled substantial resources into its domestic semiconductor industry. Initiatives like the National Integrated Circuit Industry Development Investment Fund, often referred to as the 'Big Fund,' have seen significant investment, with its third phase ('Big Fund 3.0') specifically targeting the enhancement of independent capabilities and large-scale wafer manufacturing plants. This fund aims to strengthen the entire domestic chip supply chain and build a robust, independent ecosystem.

The long-term objective is to make 'major breakthroughs in core technologies' and increase research and development (R&D) spending, with an annual increase of more than 7% projected. By 2035, China aims for its economic and scientific strength to 'significantly rise,' with per capita GDP reaching the level of mid-tier developed countries. This strategic shift signals China's determination to reduce reliance on foreign technology and establish itself as a global leader in strategically important emerging industries.