China on Oct. 23 outlined a five-year strategy that places technological self-reliance and expansion of the domestic market at the center of its economic policy, signaling a sharpened effort to insulate growth from external shocks and to recalibrate the country’s long-running development model. The communique calls for accelerating the construction of national strength in manufacturing, raising product quality and advancing capabilities in aviation, transportation and internet technologies, while maintaining the manufacturing share of the economy at a “reasonable” level.

The initiative comes against a backdrop of cooling external demand and persistent domestic headwinds. Beijing’s own previous estimates suggest the economy is on track to average roughly 5.5% annual growth across the five-year period ending in 2025—slower than the double-digit expansions of earlier decades but in line with the government’s stated goal of stable, higher-quality expansion. A central constraint is weak household consumption, which amounted to only about 40% of gross domestic product last year, leaving a sizable gap between current domestic demand and the level needed to underpin a consumption-led transition.

Policy emphasis on technological self-reliance reflects both strategic and economic calculations. By prioritizing domestic capabilities in core sectors such as semiconductors, aerospace, transportation equipment and digital infrastructure, Beijing aims to reduce vulnerability to foreign restrictions and to foster domestic supply-chain resilience. For markets, that means a likely redirection of public investment toward advanced manufacturing and research-and-development, potential preferential procurement for domestic firms, and stronger support for scale-up in key technologies.

The move also carries implications for foreign firms and international supply chains. Greater emphasis on indigenous capabilities could prompt accelerated localization of production, altered access to Chinese procurement, and increased competition for talent and capital within China’s tech ecosystem. Globally, it risks faster fragmentation of supply chains as multinational corporations weigh the costs of dual sourcing or regionalizing production to mitigate geopolitical risk.

Delivering on the plan will require addressing structural obstacles at home. Reviving household spending remains pivotal; without stronger consumption, investments into advanced manufacturing and domestic tech markets may struggle to generate the broader demand needed for sustainable growth. Measures to raise disposable incomes, improve social safety nets and encourage services-sector expansion would be important complements to industrial policies focused on supply-side strengthening.

Longer-term, the five-year pivot reflects China’s recognition that its previous growth engines—export-led manufacturing and an investment-driven property cycle—face limits in a more contested geopolitical environment and a maturing economy. The success of this strategy depends on whether Beijing can simultaneously accelerate technological upgrading, open effective channels to boost domestic consumption, and manage international frictions without undermining the global integration that still underpins much of China’s industrial capacity.