Transforming China from high-speed to high-quality economic development would be challenging even in the best of circumstances. Following the outbreak of the Iranian crisis, few would assume that the increasingly complicated geopolitical environment will not pose a strategic threat to the long-awaited economic transition. It is as important now as it has ever been for China to confidently tell the global community that it has formulated a credible and visionary blueprint that could help achieve the positive metamorphosis and assure a more prominent place for the country in world affairs. China’s two sessions, the annual meetings of the country’s top legislature and political advisory body, came under the spotlight for shedding light on Beijing’s blueprint and its iron determination to make the above transition.

China’s economic target for 2026 is set at 4.5 to 5 percent, a slight downgrade from the 5 percent achieved last year, signaling a departure from its high-speed growth model. At this year’s provincial-level two sessions, 21 out of 31 local governments also lowered their growth targets compared to 2025. The new high-quality development model has necessitated wholehearted commitment to building an economy based on technological self-reliance, innovation, new quality productive forces, and future industries. Future industries include green energy, quantum technology, embodied artificial intelligence, brain-computer interfaces, and 6G technology.

The 15th Five-Year Plan (2026-30) puts strong emphasis on high-quality, innovation-driven growth, industrial upgrading, technological self-reliance, increased domestic consumption, enhancement of living standards, and expanded openness. The period covered by the plan will be critical as China works to reinforce the foundations and push ahead on all fronts toward achieving socialist modernization by 2035.

The country’s spending on research and development (R&D) will increase 10 percent this year. Nationwide spending on R&D will increase at least 7 percent annually in the five years leading up to 2030. This reflects Beijing’s priority on building high-level technological self-reliance at a time when the country is seeking to reduce dependence on overseas advanced technologies. Policymakers also want the digital economy to account for 12.5 percent of GDP by 2030.

There is no doubt that AI is becoming central to the development of future industries. Forward-looking policies will be put in place for future industries, including embodied AI — the integration of AI into agents like robots that interact in the real world. The Five-Year Plan also called for advancement of the “AI+” initiative, a national strategy launched in 2024 aiming to integrate AI into all social and economic sectors. Despite US containment, some of China’s open-source AI models have caught up to their US counterparts in both capabilities and adoption, according to some experts.

Another engine for growth would be the planned expansion of domestic consumption. The need to promote internal circulation and build a unified national market has been kept at the top of Premier Li Qiang’s agenda, as stated in the Government Work Report. A 100-billion-yuan ($14.56 billion) special fund has been set up to boost domestic consumption through measures such as loan interest subsidies. Monthly pension payments and medical insurance subsidies also help to raise household incomes. The central government has also elevated investment in people on an equal footing with traditional outlays on physical assets such as infrastructure hardware and industrial capacity.

There is no doubt that AI is becoming central to the development of future industries. Forward-looking policies will be put in place for future industries, including embodied AI — the integration of AI into agents like robots that interact in the real world

Very often, adversity is a blessing in disguise. Confronted by challenges, such as growing geopolitical risks, weak economic momentum abroad, strains on multilateralism and free trade, and fierce Sino-US technological competition, China has no choice but to make a decisive move to promote technological self-reliance and new quality productive forces.

Also to be applauded is the move to break away from the high-speed economic growth model. A modest GDP growth target will allow the government to move toward more sustainable ways to grow the economy, away from property and infrastructure projects. Furthermore, a less ambitious GDP target will ensure that officials are less inclined to rely on large stimulus packages to boost growth.

The Guangdong-Hong Kong-Macao Greater Bay Area features prominently in the 15th Five-Year Plan. The blueprint points to the need to transform the region into a global hub for technological innovation along with major economic powerhouses such as the Beijing-Tianjin-Hebei region and the Yangtze Delta. In 2024, the Greater Bay Area accounted for one-ninth of China’s economic output.

Chinese leaders mean what they say. Our think tank is highly confident that China can transform itself into a high-quality economic entity in the near future. It is worth mentioning that the “Made in China 2025” strategic plan has succeeded in reducing China’s reliance on foreign technology and supply chains, and propelling China toward global leadership roles in several industries. The two sessions and the 15th Five-Year Plan have instilled a new ray of hope in China’s economic prospects.

Lei Wun-kong is a legislative Councilor in Macao, the president of the Association of Legal Promotion of Macao, and a senior consultant of the Chinese Dream Think Tank.

Kacee Ting Wong is a barrister, part-time researcher of Shenzhen University Hong Kong and Macao Basic Law Research Center, chairman of the Chinese Dream Think Tank, and a district councilor.

The views do not necessarily reflect those of China Daily.