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The logic behind China's internal impetus

By Bakhtizin Albert | China Daily | Updated: 2026-02-02 07:08
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This aerial drone photo taken on Dec 27, 2025 shows cargo ships loading and unloading containers at Qingdao Port in East China's Shandong province. [Photo/Xinhua]

China's 15th Five-Year Plan (2026-30) will be focused on steady innovation-driven development aimed at strengthening technological sovereignty, ensuring stable growth and enhancing economic security amid rising external uncertainty. Its key priorities are highly likely to include artificial intelligence, microelectronics, clean technologies and energy, as well as the stimulation of domestic consumption and employment. In other words, China's long-term economic stability is increasingly seen as dependent on internal drivers of development rather than on volatile external conditions.

A study conducted at our institute using multidimensional statistical analysis assessed the technological similarity of production systems in 80 countries across 55 industries. Countries were compared not by GDP, trade volumes or political alignment, but by how goods are actually produced.

Each economy can be viewed as a specific "production recipe" that reflects how much metal, energy and intermediate industrial output are required to manufacture final products. When such recipes are similar, countries are technologically close. This proximity makes it easier to establish joint ventures, scale up production and integrate economically at lower costs. While political factors certainly matter, technological similarity plays a decisive role in forming long-term, economically efficient partnerships rather than short-term arrangements.

One important result of the study is the presence of a stable industrial core concentrated in Europe. The most technologically compatible country pairs include Germany-France, Germany-Czech Republic, Germany-Austria and France-Belgium.

The United States and China, however, do not form traditional clusters. Instead, they function as separate poles of the global economy. Among the countries most technologically close to the US is Canada. In China's case, by a significant margin, the strongest technological linkage is observed with the Republic of Korea.

The ROK is strong in intermediate technologies, equipment, materials and engineering solutions, while China's advantages lie in large-scale production, assembly and deep value chains. As a result, the China-ROK combination is structurally compatible and economically effective. Strengthening this linkage reduces vulnerability to external pressure and increases the overall strength of East Asia.

It is logical, therefore, that one of the main objectives of China's new five-year plan will be to reinforce internal sources of growth, stimulate domestic demand and deepen technological sovereignty.

The new economy, based on knowledge, information and digital technologies, cannot function without access to resources and human capital capable of developing high-tech sectors. Only a small number of countries combine a solid resource base with long-term investment in science and education. Among them, China currently stands out.

China has already developed sovereign large language models and is rapidly advancing AI, one of the central priorities of the upcoming five-year plan. This trend is also reflected in international assessments. In January, the International Monetary Fund published an updated World Economic Outlook highlighting the growing importance of AI. According to the IMF, successful deployment of AI could increase global economic growth by around 30 basis points, while failure could result in a slowdown of up to 40 basis points.

Against this backdrop, energy is likely to become one of the most important strategic resources of the 21st century. It will underpin the expansion of AI, the development of new transport systems and the operation of digital infrastructure required for future financial systems. Such systems may accelerate cross-border settlements in national currencies while reducing dependence on the US dollar. They may also contribute to the emergence of new forms of digital currencies whose value is linked not to gold, but to clean energy.

In this sense, energy does not replace money but becomes its underlying value. Over the past 40 plus years, China has achieved extraordinary growth in energy production. Since 1985, electricity generation has increased by over 2,300 percent. This accounts for nearly half of total global growth in electricity generation during the period. In comparison, electricity production in the United States grew by about 65 percent.

In the era of macroregions, global influence will increasingly be determined by the ability to supply energy to complex technological systems. For major economies, expanding economic space through diversification of resources and competition for markets makes more sense than attempting to preserve a fully globalized model.

Facing complicated external environment, China's 15th Five-Year Plan may increasingly rely on internal development while it insists on opening-up.

The United States will also increasingly seek domestic-driven growth. The key question is which country will ultimately prove better prepared for leadership in the emerging structure of the global economy.

The author is the director of the Central Economics and Mathematics Institute in the Russian Academy of Sciences and a professor at the Lomonosov Moscow State University.

The views don't necessarily reflect those of China Daily.

If you have a specific expertise, or would like to share your thought about our stories, then send us your writings at opinion@chinadaily.com.cn, and comment@chinadaily.com.cn.

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