Phoenix 24
When dominance no longer guarantees growth, strategy becomes survival.
Beijing, October 2025.
Facing weak domestic demand, an aging workforce and growing trade friction with the United States, the Chinese Communist Party is preparing a complete rethink of its economic model. In the next five-year national plan, the Party aims to reinforce manufacturing and technological self-reliance while stimulating household consumption and limiting exposure to foreign shocks. Analysts warn that balancing these goals will determine the direction of China’s economy for the rest of the decade.
Industrial power remains the priority. Economic observers across Asia note that China intends to keep expanding its semiconductor, electric vehicle and rare earth sectors, asserting that its global position depends more on industrial depth than on consumer spending. The policy also reflects a defensive logic: after U.S. export controls restricted access to advanced chips and tools, Beijing sees technological independence as strategic insurance rather than economic pride.
Internally, the economy faces mounting pressure. Growth has slowed, real estate defaults have multiplied and local debt continues to rise. The dual circulation strategy, designed to integrate domestic and external markets, has struggled as consumption weakens, wages stagnate and youth unemployment remains high. Restoring confidence without sacrificing stability will test the Party’s adaptability.
In speeches delivered by senior officials, the new tone is clear. China seeks quality growth built on efficiency, innovation and self-sufficiency instead of speed. Reforms under discussion include cutting overcapacity in traditional industries, channeling funds toward services and digital sectors, and distributing subsidies with tighter oversight. At the same time, measures that increase household income and improve the social safety net are being promoted to encourage spending.
Geopolitical risk now drives much of the planning. As the U.S. tightens tariffs and restricts technology exports, economic policy and national security have merged. Industrial policy has become defense policy. The question for Beijing is whether it can remain integrated in global trade while reducing dependence on rival economies.
For Europe and the Americas, the consequences are significant. If China succeeds, it may preserve its manufacturing dominance while creating a stronger internal market. If it fails, stagnation could ripple through supply chains worldwide. Global institutions such as the International Monetary Fund and the World Bank already anticipate that any structural slowdown in China would drag regional growth across Asia.
Domestically, economic performance remains the foundation of political legitimacy. Continued slowdown or rising inequality could undermine the Party’s narrative of national rejuvenation. On the other hand, renewed growth and technological progress would strengthen the model of state-directed capitalism that has defined the current era.
The next few years may redefine both China and the global order. Whether Beijing remains the world’s factory, becomes a global consumer power or forges a new hybrid identity will depend on how successfully the Communist Party manages this recalibration. One certainty remains: every adjustment in Beijing reverberates far beyond its borders.
Facts that do not bend. / Hechos que no se doblan.