BUSINESS

Two Sessions: China to Upgrade Traditional Industries, Fuel Hard Tech in 2026

Published: Mar. 5, 2026 6:43 p.m. GMT+8

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Key sectors identified for breakthroughs include semiconductors, high-end industrial machinery and advanced instruments. Photo: VCG

China is placing advanced manufacturing, artificial intelligence (AI) and other cutting-edge technologies at the center of its economic strategy as it launches a new five-year development plan aimed at boosting innovation and strengthening the real economy.

In the annual government work report delivered Thursday, Premier Li Qiang said China would continue to focus on high-quality growth in 2026, prioritizing technological innovation, industrial upgrading and the development of new quality productive forces.

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China’s 15th Five-Year Plan (2026-2030) prioritizes advanced manufacturing, AI, and technological innovation to drive high-quality economic growth and boost digital economy’s core industries to 12.5% of GDP.
26% of 109 major projects will focus on industrial upgrades, future technology, and innovation, with 200 billion yuan allocated for modernizing traditional industries that still make up 80% of manufacturing output.
China’s AI industry rose 24% to over 900 billion yuan in 2024; R&D spending will increase at least 7% annually targeting breakthroughs in semiconductors, advanced machinery, and foundational technologies.

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What Happened When

September 2023：: President Xi Jinping introduced the term 'new quality productive forces' during an inspection tour of Heilongjiang province.

2024：: 'New quality productive forces' was included in the government work report for the first time; local governments began to accelerate growth driver efforts in 2024 and through to 2026.

2024：: China’s AI industry exceeded 900 billion yuan in market size, growing 24% from 2023.

2024：: As of 2024, China had more than 5,300 AI companies, including 71 unicorn startups valued at over $1 billion.

March 5, 2026：: Premier Li Qiang delivered the annual government work report, emphasizing high-quality growth, technological innovation and industrial upgrading priorities for 2026.

AI generated, for reference only