Implications of China’s 15th Five-Year Plan (2026–2030): AI, County-Level Regions, and Economic Security

Key Points

1. The outline of China’s 15th Five-Year Plan, released on March 13, contained no major surprises, but it did reaffirm and further clarify the leadership’s continued emphasis on industrial and technological innovation as a core policy direction.
2. In addition to addressing labor-market risks associated with the rapid diffusion of AI, the plan points to an expanded role for county-level regions as emerging primary living spaces, while also calling for the continued strengthening of competitive advantages in areas tied to economic security, including rare earths.
3. Rather than introducing bold new initiatives, China’s bureaucratic apparatus appears increasingly focused on the steady and finely tuned adjustment of policy parameters to address a growing set of domestic challenges.

No Major Surprises

The National People’s Congress convened in Beijing from March 5 to 12, 2026. Following its conclusion, the outline of China’s 15th Five-Year Plan (2026–2030) was released on March 13. Its official title is The Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China. The document offers important insights into China’s policy trajectory.

Five-Year Plans lay out the Chinese government’s principal objectives, priority industries, and key technological domains. On the basis of this national roadmap and its implied priorities, ministries and local governments are then responsible for implementation. As such, it is the single most important document for anticipating the direction of China’s bureaucratic apparatus over the next five years.

The current plan consists of 18 parts and 62 chapters. Its main contents largely follow the draft released in October of the previous year. Many of the concepts and policy ideas featured in specific sections—such as the “AI Plus” Action Plan (a national strategy promoting the integration of AI across industry, the economy, and society) and “future industries”—had already been announced earlier, with some measures already under implementation. While the absence of a five-year GDP growth target attracted attention, the plan as a whole was notable more for continuity than surprises.

Differences from the Draft: Digitalization and Demographic Issues

Even a quick look at the table of contents highlights two important points.

First, the plan continues to prioritize industrial and technological innovation. This has been a consistent feature of Chinese policy, and it is clearly reflected in the structure of the current plan: following the introductory section, Part II focuses on “modern industry,” Part III on “science and technology,” and Part IV on “digitalization.” Given that the expansion of domestic consumption—an area emphasized in recent Chinese economic policy—appears only in Part V, the plan suggests that the government’s center of gravity may still lie more on production than on consumption.

Second, there are some notable differences from the draft released in October of last year. As noted by Naoto Saito of Daiwa Institute of Research, digitalization and responses to demographic challenges—neither of which had been presented as standalone sections in the earlier draft—now appear as standalone parts in the final plan.

Part IV, titled “Deeply Advancing the Development of Digital China and Enhancing the Level of Digital and Smart Development,” begins with policies to strengthen computing capacity, followed by measures to promote the integration of AI with the real economy and its application in public services.

Demographic issues are addressed in Part XI, which includes policies on childcare support, education, and extending healthy life expectancy.

Advancing AI Policy and Managing Its Risks

Against this backdrop, three aspects of the plan stand out in particular: AI, the county-level economy, and economic security.

The first concerns how the plan addresses the risks associated with advancing AI policy. As widely anticipated, references to AI have increased significantly in the current plan (Table 1). Mentions increased from six in the previous plan to thirty in the current one—a sharp rise. In other words, what had previously been framed in the relatively abstract language of “innovation” is now expressed more concretely through references to specific technologies.

Particularly important here is the point—also highlighted in a report by the International Labour Organization (ILO)—that the development of generative AI is expected to have a pronounced impact on labor markets, especially in high-income and upper-middle-income countries. In other words, the more actively AI is deployed across society, the more likely it is to generate short-term labor- substitution effects, creating a potential policy dilemma for governments promoting AI. In China, which aspires to become a high-income economy, both researchers and government officials have long been aware of this issue. At an international conference attended by the author earlier this year, Chinese economists consistently treated the impact of AI as central to their research agendas.

The current Five-Year Plan also addresses these concerns. Overall, the plan emphasizes forward-looking applications of AI, such as industrial innovation, real-world deployment, institutional development, and the promotion of Chinese solutions abroad in conjunction with the Belt and Road Initiative. There is, however, one passage where the tone shifts slightly. This appears in Chapter 41, titled “Promoting High-Quality and Sufficient Employment.”

The plan states that “achieving high-quality and sufficient employment” should be treated as a priority objective, and calls for the establishment of mechanisms to assess the impact of major policies, key projects, and the allocation of productive capacity on employment. It further notes the need to “respond comprehensively to the impact of changes in the external environment and the development of new technologies such as artificial intelligence on employment,” and calls for the creation of an evaluation system for high-quality and sufficient employment.

In essence, the plan calls for monitoring the extent to which AI substitutes for labor and for introducing countermeasures as needed. Monitoring this is likely to be feasible, and potentially with a relatively high degree of accuracy, through firm-level and worker-level data collection. The more difficult challenge lies in designing effective policy responses. While the textbook response would be to facilitate labor mobility across sectors through reskilling, implementing such measures in practice is unlikely to be straightforward.

The Growing Importance of “County-Level Regions” as Living Spaces

The second point concerns references to county-level regions. China’s administrative hierarchy consists of the central, provincial, municipal, county, and township levels. Compared with the previous three Five-Year Plans, the current plan places relatively greater emphasis on county-level regions (Table 2).

Specifically, Chapter 26, titled “Promoting the Development of Livable, Workable, and Harmonious Rural Areas,” states that infrastructure and public services should be “scientifically planned on a county basis,” and calls for the integrated planning, construction, management, and maintenance of infrastructure within county jurisdictions. It also emphasizes improving educational conditions for county-level general high schools and boarding schools at the county-level regions, as well as promoting the development of integrated county-level healthcare systems, with a particular focus on sending medical personnel to lower-level localities. These provisions underscore the role of county-level regions as a core unit for delivering public services such as infrastructure, education, and healthcare.

Chapter 31 , “Further Advancing People-Centered New-Type Urbanization,” , which focuses on urbanization, also states that population concentration in county seats and central towns should be encouraged in an orderly manner.

In recent years, a growing number of observers have argued that county-level regions are becoming increasingly important as primary living spaces for China’s population. While major cities serve as the principal arenas for geopolitical competition—driven by intense work environments and concentrated policy resources to advance scientific and technological innovation—county-level regions, rather than villages, are increasingly expected to serve as the spaces where most people can pursue more stable family life, including child-rearing, while also enjoying access to public services.

A comparison with the previous three plans shows a gradual decline in references to administrative levels such as provinces and villages, while references to counties have increased. From this perspective, industrial and technological innovation, along with digitalization—both highlighted at the beginning of the plan—appear to be priorities for sustaining China’s position in international competition and are primarily associated with major urban centers. By contrast, county-level regions may be expected to serve as the foundation for sustaining quality of life across China’s vast territory, particularly for those who opt out of the intense competition of large cities.

Continued Emphasis on Economic Security

Third, it is worth examining how the plan addresses economic security. Looking at the frequency of references to “security” broadly defined—including uses related to food safety—the number stands at 140 in the current plan, a decline from the previous two plans. This, however, does not indicate any shift away from the emphasis on national security. In fact, references specifically to “national security” remain unchanged compared to the previous two plans (Table 3). In particular, Chapter 51, titled “Strengthening the National Security System and Capacity,” continues to stress national security repeatedly, much as the prior plan did.

Chapter 52, “Safeguarding National Economic Security,” addresses areas such as food security, energy and resource security, financial risk management, and cybersecurity. In light of recent developments—including renewed attention to crude oil imports following U.S. military action against Iran—energy security has once again come under scrutiny. Notably, however, the Five-Year Plan—formulated before these developments—states that China will maintain crude oil production at approximately 200 million tons.

While rare earths are not explicitly mentioned in the chapter on economic security, they do appear in Chapter 4, “Optimizing and Upgrading Traditional Industries.” The plan states that China will “establish and improve mechanisms for assessing and responding to security risks in industrial and supply chains, and continuously strengthen competitive advantages in areas such as rare earths, rare metals, and superhard materials. At the same time, it will strengthen the high-quality and efficient comprehensive utilization of strategically important mineral resources.”

Concluding Observations

This article has examined three themes in the Five-Year Plan in particular: AI, the role of county-level regions, and economic security. A close reading of the plan suggests that, overall, greater emphasis is placed on industrial development and the maintenance and advancement of the economy and society than on security concerns per se.

At the same time, the plan underscores the breadth of domestic challenges China faces before it can turn to external or international issues. These include employment pressures, demographic challenges such as declining birth rates and population aging, social security concerns, and the need for infrastructure development in local regions.

Taken together, this suggests that the Chinese government is less inclined to introduce bold or eye-catching new initiatives and is instead focused on pragmatic, finely calibrated policy adjustments to address a wide range of domestic challenges.

(c) Alamy/amanaimages