2025 marks the final year of the 14th Five-Year Plan. During the Third Session of the 14th National People’s Congress, premier Li Qiang presented that in terms of the continuous development of its economy, China has set itself the goal to complete the goals and tasks of the “14th Five-Year Plan” with high quality and lay a solid foundation for the “15th Five-Year Plan”. In today’s fast-evolving global economy, China considers the need for industrial modernization is more critical than ever. As the economy strives to enhance productivity and competitiveness, integrating technological innovation with industrial growth has become a key priority. The latest strategic direction focuses on fostering new productive forces, upgrading traditional industries, and strengthening the digital economy to drive sustainable development.
Advancing Industrial Innovation and Modernization
For China to build a resilient and high-value industrial ecosystem, it needs to make a strong push toward integrating scientific and technological advancements with industrial innovation. This involves expanding advanced manufacturing, boosting the modern service sector, and accelerating the transition to a new industrial paradigm that leverages cutting-edge technology.
One key approach is to support new industrialization, which fosters synergy between traditional and emerging industries. This ensures that industrial transformation is regionally adaptable, meaning different localities can develop industries suited to their unique economic structures and resources.
Expanding Emerging and Future Industries
A central element of industrial transformation is the cultivation of emerging and future industries. This includes promoting integrated clusters of strategic industries, where sectors such as biomanufacturing, quantum technology, 6G, and embodied intelligence are prioritized for long-term investment.
To drive innovation further, large-scale demonstration projects will be launched to test new technologies, products, and business scenarios in real-world applications. Additionally, frameworks will be developed to enhance future industrial investment, ensuring that high-potential sectors receive the funding and support needed to scale effectively.
Key initiatives include:
- Promoting the commercial aerospace sector and the low-altitude economy, which are set to revolutionize transportation and logistics.
- Strengthening service-oriented manufacturing, enabling traditional industrial enterprises to integrate high-value services into their business models.
- Supporting specialized and high-growth enterprises, such as unicorns (startups valued over $1 billion) and gazelle enterprises (fast-growing firms), to accelerate progress in new and niche markets.
Transforming and Upgrading Traditional Industries
While new industries are crucial, the modernization of China’s traditional industries remains a fundamental part of economic transformation. The focus is on restructuring key industrial supply chains, fostering high-quality production, and revitalizing existing sectors through innovation.
To achieve this, companies will be encouraged to invest in:
- Major technology transformation and equipment renewal projects, making manufacturing more efficient and competitive.
- Digital transformation, ensuring that industries adopt smart production processes and data-driven decision-making.
- Quality enhancement programs, such as initiatives to increase product variety, improve quality standards, and strengthen brand recognition.
Additionally, service providers with expertise in both industrial processes and digital technology will play a key role in guiding businesses—especially small and medium-sized enterprises (SMEs)—through the digitalization process.
Unlocking the Potential of the Digital Economy
The digital economy continues to be a major growth driver, with artificial intelligence (AI) and big data at the center of industrial innovation. The “Artificial Intelligence +” initiative will facilitate deeper integration of AI-powered automation in sectors such as manufacturing, retail, and logistics.
Several key areas of focus include:
- Expanding the application of 5G technology to improve industrial connectivity and efficiency.
- Developing intelligent manufacturing equipment, including AI-powered robotics, autonomous vehicles, and smart devices.
- Building globally competitive digital industrial clusters, enhancing computing infrastructure, and optimizing national data resource management.
To support cross-border digital trade, regulations will be developed to promote the secure and regulated flow of data across industries and international markets. The platform economy, which includes e-commerce, digital services, and online marketplaces, will also be optimized and better regulated to ensure that it continues to drive innovation, consumption, and job creation.
Conclusion: A Holistic Approach to Industrial Modernization
The path to industrial modernization outlined by premier Li Qiang during the Third Session of the 14th National People’s Congress, requires a multi-faceted strategy that balances innovation-driven growth with the transformation of traditional industries. By fostering emerging technologies, upgrading production capacity, and strengthening the digital economy, businesses can navigate the rapidly changing industrial landscape more effectively. Ultimately, a well-structured industrial transformation strategy will not only enhance global competitiveness but also ensure long-term economic resilience and sustainability in the digital age.