China bows to de-industrialization

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Reading China’s five-year plans, one of the most immediately striking things is just how many things they attempt to plan. These are not just documents about where to build airports or highways (although such proposals do go into the plan). Recent iterations also cover many things that are not obviously amenable to top-down direction, such as what sorts of technological breakthroughs will happen in the future, and how social mores and customs will develop. In China’s Leninist political system, government attempts to specify the contours of “national economic and social development” are the norm rather than the exception. In this context, restraint can be more notable than ambition. It’s not that surprising when plans declare extraordinary goals; it is more surprising when plans step back from attempted intervention. The 15th Five-Year Plan for the years 2026-30, now being drafted according to a set of “recommendations” approved by the Communist Party leadership in October, will certainly not be a laissez-faire document. Most media coverage has emphasized how the recommendations show China prioritizing industrial policy as it attempts to gain an edge in its geopolitical competition with the US. Here is a relevant section from the official English translation: A modernized industrial system provides the material and technological foundations for Chinese modernization. We should keep our focus on the real economy, continue to pursue smart, green, and integrated development, and work faster to boost China’s strength in manufacturing, product quality, aerospace, transportation, …