What China’s 14th Five-Year Plan Means for Investors

China recently unveiled its 14th five-year plan (FYP) to guide the country’s economic development over the coming five years, along with the blueprint for a long-term strategy that outlines its vision for 2035.

Overall, we think the new long-term plan should imply a stable outlook for China, with diverse potential opportunities for investors across different sectors. China’s GDP growth should gradually moderate: with the emphasis on quality and sustainable growth, large-scale policy stimulus is no longer an option, except in extremely adverse conditions. Structural policies may be deployed instead to support growth in targeted sectors while mitigating systemic risks.

Strategically important sectors, such as technology, infrastructure, modern manufacturing and renewable energy could benefit from China’s focus on self-reliance and its “dual-circulation” strategy, while in the housing and financials sectors, risk will be carefully monitored. Service sectors such as education, research and development (R&D), and healthcare may also benefit from government support.