Authoritative Interpretation of Seven Key Points in the 15th Five-Year Plan Proposal: Accelerating the Development of a Financial Powerhouse

    The “Proposal of the Central Committee of the Communist Party of China on Formulating the 15th Five-Year Plan for National Economic and Social Development” was released on October 28. The Proposal outlines the guiding principles and primary objectives for economic and social development during the 15th Five-Year Plan period, charting a grand blueprint for the next five years.

    What key messages and policy signals does this approximately 20,000-word Proposal convey? Shanghai Securities News has identified seven major highlights and connected with 18 experts for authoritative interpretations.

    Key Point 1

    High-Quality Development Achieves Significant Results

    The Proposal outlines the primary objectives for economic and social development during the 15th Five-Year Plan period. Among these, the foremost goal is to “achieve significant results in high-quality development.”

    Wang Qing, Chief Macro Analyst at Orient Gold Credit, told reporters that the 15th Five-Year Plan period will continue to de-emphasize economic growth targets while prioritizing the advancement of high-quality economic development.

    The Proposal states that “economic growth will be maintained within a reasonable range.” Regarding this, Wang Qing analyzed that against the backdrop of significant uncertainties in both domestic and international environments over the next five years, refraining from setting specific quantitative growth targets will facilitate a more composed response to various risks and challenges, enhance the flexibility of macro policies, and guide local governments and departments to prioritize improving the quality of economic development.

    The Proposal also sets targets for “a marked increase in the household consumption rate” and “a substantial improvement in the level of self-reliance and strength in science and technology.”

    Qi Yunlan, a researcher at the Institute of Market Economy under the Development Research Center of the State Council, told reporters that compared with countries at similar stages of development, China's consumption rate has long been relatively low. The new proposals signify that over the next five years, a long-term mechanism will be formed through policy coordination, institutional optimization, and industrial upgrading. This will further raise residents' income levels to boost consumption capacity, improve the social security system, enhance supply levels, and improve the consumption environment to increase consumption willingness, ultimately achieving the goal of boosting consumption.

    In Wang Qing's view, to effectively advance high-quality development, the strategic focus must be on independent innovation and technological self-reliance to drive the transition from old to new growth drivers. The driving force of domestic demand, particularly household consumption, for economic growth must be further strengthened.

    Liao Bo, Co-Chief Macro Analyst at Zheshang Securities, told reporters that the policy direction of the 15th Five-Year Plan will continue the current tone, advancing economic restructuring and vigorously developing new productive forces. Under the priority of high-quality development, enhancing technological self-reliance and developing new productive forces will be the top policy priorities.

    Key Point 2

    Consolidating and Strengthening the Foundation of the Real Economy

    The “Proposal” places “building a modern industrial system and consolidating and strengthening the foundation of the real economy” as the first strategic task. Multiple experts noted that this deployment establishes a comprehensive logic for the real economy—defining direction, identifying priorities, and strengthening support—providing a clear path for high-quality industrial development.

    The Proposal outlines a series of measures, including “adhering to the direction of intelligent, green, and integrated development,” “maintaining a reasonable proportion of manufacturing and building a modern industrial system with advanced manufacturing as its backbone,” and “promoting the quality upgrade of key industries.”

    Liu Xiangdong, Deputy Director of the Research and Information Department at the China Center for International Economic Exchanges, told reporters that the Proposal first establishes the core anchor of a modern industrial system: placing the real economy in a prominent position and explicitly requiring “maintaining a reasonable proportion of manufacturing.” This arrangement not only highlights the pivotal role of building a manufacturing powerhouse but also signifies that constructing a modern industrial system anchored by advanced manufacturing will become the primary task in optimizing the supply system over the next five years.

    “Focusing on building emerging pillar industries,” “implementing industrial innovation projects,” and “proactively planning future industries”—the Guidelines outline key arrangements for cultivating and strengthening emerging and future industries.

    Liu Xiangdong noted that the Guidelines define three major development directions—“intelligent, green, and integrated”—to drive industrial upgrading through digital intelligence and low-carbon technologies. It then adopts a dual-track approach of “stabilizing traditional industries” and “cultivating emerging industries,” simultaneously advancing the transformation of traditional industries toward smart and green manufacturing while accelerating the clustering of emerging sectors like new energy and low-altitude economy, and laying the groundwork for future industries such as quantum technology. Finally, it strengthens safeguards through expanding the capacity and improving the quality of services alongside upgrading infrastructure, forming a closed-loop support system.

    Wu Yin, Professor at the School of Economics and Director of the Institute of Political Economy at Southwestern University of Finance and Economics, told reporters: Traditional industries should not be preserved in isolation but rather fortified through industrial transfer, strengthening and filling gaps in industrial chains, and upgrading industrial clusters to solidify the “foundation.” Emerging and future industries, meanwhile, require an unconventional approach to innovation to break through frontiers, relying on planning to define directions and technological breakthroughs to overcome bottlenecks. Crucially, these two sectors are not isolated but form a synergistic force of “stabilizing foundations” and “expanding frontiers,” ensuring industrial system security while achieving breakthroughs in global competition.

    “Achieving this goal hinges on implementing specific pathways for sub-industries and promoting coordination among central and local governments, public and private entities, industries, and markets,” Wu Ying emphasized.

    Key Point 3

    Accelerating High-Level Scientific and Technological Self-Reliance

    The Proposal calls for accelerating high-level self-reliance in science and technology to lead the development of new productive forces. Chinese-style modernization must be underpinned by technological modernization. Seizing the historic opportunities of the new round of technological revolution and industrial transformation, China will advance the coordinated development of education, science and technology, and talent to enhance the overall effectiveness of the national innovation system. This will comprehensively strengthen independent innovation capabilities, secure the high ground in technological development, and continuously foster new productive forces.

    Zhang Yuzhe, Director and Researcher of the High-Tech Industry Research Office at the Institute of Industrial Economics and Technological Economics under the National Development and Reform Commission, stated that technological competition will be pivotal in future great power rivalry. The integrated development of scientific and technological innovation with industrial innovation is key to achieving high-quality development and building a modern industrial system, serving as the cornerstone for developing new productive forces. Only by increasing financial investment and achieving self-reliance and strength in science and technology can the dream of national rejuvenation be realized.

    “Artificial intelligence, aerospace, robotics, and other fields are sparking a new industrial revolution. Accelerating high-level self-reliance in science and technology is an inevitable choice against the backdrop of the current new round of scientific and technological revolution and industrial transformation. For China to achieve high-quality growth, it must further enhance the technological content of various products—that is, pursue industrial and technological upgrades. These efforts cannot be separated from scientific and technological innovation and can only be achieved through greater independent innovation,” Su Jian, Director of the National Economic Research Center at Peking University, told reporters.

    In Zhang Yuzhe's view, this requires deep integration of scientific and industrial innovation, coordinated development of national strategic scientific capabilities, and enhanced systematic R&D capacity. It involves strengthening self-reliance in foundational scientific infrastructure and coordinating the construction of innovation platforms and bases. Concurrently, regional innovation systems must be refined by establishing regional innovation hubs and industrial technology centers, enhancing the strategic role of international innovation centers, accelerating the efficient commercialization of major scientific achievements, and fostering a globally competitive open innovation ecosystem.

    Zhang Yuzhe emphasized the need to focus on critical areas, continuously advancing frontier fields like artificial intelligence, quantum information, and controlled nuclear fusion, while simultaneously promoting development in new materials and high-end equipment sectors. These directions are not isolated but interconnected and mutually reinforcing; only through strengthened integrated innovation can a cohesive research effort be formed.

    “Simultaneously, the integrity of the industrial system requires further strengthening of original innovation and breakthroughs in key core technologies. Different measures must be taken to expand into frontier fields and address shortcomings in traditional industries, achieving breakthroughs in frontier fields and catching up in traditional industries through a new national system,” Zhang said.

    Key Point 4

    Building a Strong Domestic Market

    The Proposal states that a robust domestic market serves as the strategic foundation for Chinese-style modernization. It emphasizes maintaining the strategic focus on expanding domestic demand, integrating livelihood improvements with consumption promotion, and balancing investment in physical assets with investment in human capital. New demand should drive new supply, while new supply should create new demand, fostering a virtuous cycle between consumption and investment, supply and demand. This approach enhances the endogenous momentum and reliability of the domestic economic cycle.

    Hong Tao, a market regulation expert at the Ministry of Commerce and director of the Institute of Commercial Economics at Beijing Technology and Business University, told reporters that “promoting virtuous cycles between consumption and investment, supply and demand” emphasizes potential consumption and effective investment. It requires the organic integration, mutual linkage, and joint development of both, with consumption-driven investment being particularly crucial. Future coordinated development of investment and consumption will better promote consumption upgrading and its sustainable growth.

    “This signifies that China will strengthen the scale advantages and resilience of its ‘domestic market’ at a higher level to address challenges posed by external uncertainties,” said Hong Yong, an expert from the China Digital-Physical Integration 50-Person Forum think tank.

    Qi Yunlan believes that the Guidelines clearly state the need to enhance the endogenous momentum and reliability of the domestic economic cycle, indicating that creating new demand and new supply will be a key policy direction in the future.

    The Proposal outlines a series of measures, including “deepening the implementation of special actions to boost consumption,” “establishing and improving management approaches for new consumption formats, models, and scenarios,” and “implementing paid staggered leave.” In Hong Yong's view, this reflects a shift from short-term consumption stimulation to long-term institutional development. Emphasis on measures such as “expanding service consumption by focusing on relaxing market access and integrating business formats” and “cultivating international consumption hub cities” will help drive consumption structure upgrades.

    The Proposal also calls for resolutely removing bottlenecks hindering the development of a unified national market. Yuan Haixia, Director of the China Chengxin International Research Institute, told reporters that the 15th Five-Year Plan will make systematic arrangements to address disorderly and irrational competition within industries, including eliminating local protectionism and market segmentation, and accelerating the construction of a high-standard market system.

    Key Point 5

    Enhancing Fiscal Sustainability

    The Proposal calls for leveraging proactive fiscal policies to enhance fiscal sustainability. It emphasizes strengthening scientific fiscal management, improving coordination of fiscal resources and budgets, and bolstering financial support for major national strategic tasks and basic livelihood needs. Deepening zero-based budgeting reforms, unifying budget allocation authority, optimizing fiscal expenditure structures, and strengthening budget performance management. Improving local tax and direct tax systems, refining tax policies for business income, capital gains, and property income, standardizing tax incentives, and maintaining a reasonable macro tax burden. Appropriately strengthening central government responsibilities and increasing the proportion of central fiscal expenditures. Increasing local fiscal autonomy. Enhancing financial and accounting oversight. Accelerating the establishment of a long-term government debt management mechanism compatible with high-quality development.

    “This clearly sets strengthening scientific fiscal management as the overarching theme of fiscal reform, while placing greater emphasis on safeguarding major strategic initiatives and basic livelihood needs. It signifies that the state prioritizes both investment-driven growth and improving people's livelihoods and consumption,” Zhang Yiqun, Vice Chairman of the Performance Committee of the Chinese Institute of Public Finance, told reporters.

    Luo Zhiheng, Chief Economist at Yuekai Securities, stated that enhancing fiscal sustainability hinges primarily on maintaining a reasonable macro tax burden. During the 15th Five-Year Plan period, while implementing existing tax and fee reduction policies and maintaining basic macro-tax burden stability, structural adjustments and optimizations should be made to these policies, prioritizing precision and efficiency.

    Regarding “accelerating the establishment of a long-term government debt management mechanism compatible with high-quality development,” Luo Zhiheng emphasized that the key lies in establishing hard budget constraints for local governments to fundamentally curb local government debt risks. This can be achieved through five specific measures: First, establish a comprehensive local government debt monitoring system and a dynamic debt risk early warning system to strengthen assessments of the long-term sustainability of local government debt. Second, establish standardized capital budgets and debt budgets to reinforce hard constraints on local government budgets. Third, actively promote the transformation of local financing platforms and establish firewalls between fiscal risks and market risks. Fourth, strengthen accountability for non-compliant financing. Fifth, enhance debt information transparency and improve external oversight mechanisms.

    The Proposal also calls for accelerating the improvement of market-based allocation mechanisms for production factors. This involves promoting efficient resource allocation across all factors, establishing unified urban-rural construction land markets, well-functioning capital markets, fluid labor markets, and efficient technology transfer markets. Compiling a macro balance sheet will comprehensively map existing resource assets and optimize asset-liability structures. Policies on mergers and acquisitions, bankruptcy, and asset swaps should be refined to revitalize underutilized land, idle properties, and existing infrastructure.

    “These measures aim to strengthen national economic security safeguards, optimize the government's asset-liability structure, enhance the efficiency of revitalizing, integrating, and utilizing state-owned assets in administrative and public institutions, leverage the role of state-owned assets as a safety net, effectively utilize government debt space, ensure the stability of real estate and financial markets—particularly small and medium-sized banks—and prevent systemic financial risks,” Zhang Yiqun stated.

    Key Point 6

    Accelerating the Development of a Financial Powerhouse

    The Proposal calls for “accelerating the development of a financial powerhouse” and outlines a series of specific measures.

    The Central Financial Work Conference held in October 2023 first proposed the goal of “accelerating the development of a financial powerhouse.” Subsequently, the concept of a financial powerhouse has been further enriched—it should be grounded in a robust economic foundation, possessing world-leading economic strength, technological prowess, and comprehensive national power, while also featuring a series of key core financial elements, including a strong currency and a powerful central bank.

    The Proposal calls for improving the central bank system, establishing a scientific and sound monetary policy framework and a comprehensive macroprudential management system, and ensuring the smooth transmission of monetary policy.

    “In recent years, China's monetary policy has undergone several rounds of tool innovation and mechanism reform, characterized by a shift from a quantity-based regulatory framework to a price-based one,” said Ming Ming, chief economist at CITIC Securities. He anticipates that over the next five years, the People's Bank of China will continue deepening reforms of the modern central banking system to further optimize monetary policy transmission efficiency. Structurally, the “five major financial initiatives” remain key focal points.

    “Macroprudential management serves as a ‘safety valve’ for preventing systemic risks,” said Zeng Gang, Chief Expert and Director of the Shanghai Finance and Development Laboratory. He noted that as financial market interconnectedness continues to rise, risks originating from a single institution or sector can easily spread across markets. Building a “comprehensive macroprudential management system” requires focusing on key areas such as systemically important financial institutions and cross-border capital flows. It entails improving risk monitoring, early warning, and resolution mechanisms, using countercyclical tools to smooth market fluctuations, and breaking risk transmission chains at the systemic level to establish the first line of defense for financial stability.

    The “Proposal” clearly states that the financial institution system should be optimized to encourage all types of financial institutions to focus on their core businesses, improve governance, and pursue differentiated development.

    “China's financial institutions are diverse in type. Only by clarifying their positioning and focusing on their core businesses can they avoid homogenized competition and internal resource wastage, thereby precisely matching the diverse needs of the real economy,” suggested Zeng Gang. He recommended that large financial institutions strengthen their comprehensive service capabilities and focus on national major strategies and key projects; small and medium-sized financial institutions should deepen their roots in local markets and niche sectors to enhance the quality and efficiency of inclusive financial services; and non-bank financial institutions should leverage their professional advantages to enrich the supply of investment and financing tools.

    Regarding the “building a secure and efficient financial infrastructure” proposed in the Recommendations, Dong Ximiao, Chief Researcher at China UnionPay, told reporters that its primary purpose is to ensure the stable operation of the financial system and provide solid support for the real economy. An autonomous, controllable, efficient, and secure financial system can not only better serve the modern industrial system and the development of new productive forces but also enhance China's voice in global financial governance.

    The Proposal also calls for comprehensively strengthening financial regulation, enhancing coordination between central and local regulators, diversifying risk resolution resources and methods, and establishing a risk prevention and resolution system to ensure the stable operation of the financial sector.

    “Comprehensive financial regulation is the foundation for standardizing financial operations,” said Zeng Gang. By improving regulatory rules and advancing regulatory technology, we can both maintain the bottom line of preventing systemic risks and create a compliant and orderly environment for financial innovation, ensuring the steady and far-reaching development of China's financial powerhouse.

    Key Point 7

    Enhancing the Capital Market's Function of Balancing Investment and Financing

    The Proposal calls for improving the inclusiveness and adaptability of capital market systems to enhance the market's function of coordinating investment and financing.

    Tian Xuan, Dean of the National Institute of Financial Research at Tsinghua University and Vice Dean of the PBC School of Finance, told reporters that the core task of capital market reform in the next five years is to enhance institutional inclusiveness and improve investment and financing functions. This signifies that the capital market will place greater emphasis on the breadth and depth of serving the real economy, particularly in supporting technological innovation, green development, and the financing needs of small and medium-sized enterprises.

    “This development path sends a clear signal: the capital market is shifting from ‘financing-dominated’ to ‘balanced investment and financing,’ and from scale expansion to quality enhancement. It aims to build a modern capital market system that aligns with high-quality development, supports technological innovation, and meets residents' wealth management needs.” Tian Xuan noted that this transformation not only emphasizes market efficiency in resource allocation but also prioritizes balancing interests and ensuring long-term stability at both ends of investment and financing. It is foreseeable that during the 15th Five-Year Plan period, the capital market will accelerate its evolution toward becoming a modern market characterized by standardization, transparency, openness, vitality, and resilience, playing a pivotal role in promoting high-quality economic development.

    Guan Tao, Global Chief Economist at BOC Securities, believes that as relevant reform measures take effect, China's capital markets will become more market-oriented, internationalized, and governed by the rule of law, better serving economic and social development and the construction of a financial powerhouse. In this process, as the quality of listed companies improves, long-term investment concepts are solidified, and investor protection is strengthened, domestic and foreign investors will better share in the growth dividends of China's modernization drive, ensuring that the development of the capital market truly benefits not only the country but the entire world.

    The Proposal also advocates actively developing direct financing channels such as equity and bonds, while steadily advancing futures, derivatives, and asset securitization.

    Zhang Peng, Deputy Director of the Listed Companies Research Center at the Chinese Academy of Social Sciences, told reporters that steadily developing futures, derivatives, and asset securitization will enrich existing financial market products and services, offering more investment options for corporate and household wealth. It will also help mitigate risk volatility in financial products and enhance absolute returns on asset portfolios.

    In Tian Xuan's view, future reform directions may unfold in several key areas: focusing on serving key sectors of the real economy and national strategies, steadily introducing more commodity futures and options varieties, and actively exploring innovations in financial futures and derivatives; building upon existing corporate asset securitization and credit asset securitization, further expanding the scope of underlying assets to support the development of innovative asset securitization products such as green assets, intellectual property, and infrastructure REITs; Optimizing infrastructure for futures and derivatives trading, clearing, and settlement; improving legal frameworks and regulatory systems for asset securitization; and steadily expanding market access for foreign participants in futures and derivatives markets.