China is no longer 'catching up', it is 'arriving'

China is entering its next planning cycle with the confidence of a nation that has crossed a historic threshold, as policymakers signal a shift from the phase of reform and adaptation to one of internal consolidation and self-assured modernity.

Adopted at the 4th Plenum of the 20th Central Committee, the 15th Five-Year Plan (2026–2030) marks the country’s transition from the “catch-up” years of reform and opening to a new stage defined by stability, technological independence, and social equilibrium.

Analysts note that the tone of the new plan reflects a maturing socialist economy that now seeks coherence over expansion, and balance over breakneck growth.

For over four decades, China’s reform and opening policy served as a vast experiment in adaptation to global markets. That experiment, which lifted hundreds of millions out of poverty and transformed the country into the world’s second-largest economy, is now giving way to a phase of deepening and grounding.

The 15th Plan, according to government statements, will prioritise technological self-reliance, institutional resilience, and redistribution mechanisms to ensure “common prosperity” in a rapidly evolving economy.

The pursuit of growth is no longer measured solely in speed but in quality, inclusivity, and sustainability.
However, analysts note that the phase represents not a rupture but a continuation of the long arc of socialist planning – the long march from survival to sovereignty.

Beijing’s strategy orbits around technological upgrading, productivity gains, a consumption-driven domestic economy, and stronger regional integration.

Therefore, experts reckon that the 15th Five-Year Plan is not a guide for the next half-decade but, in essence, a bridge toward the 2035 goal: a key milestone en route to the second centenary objective of building a prosperous and strong socialist nation by 2049.

In tandem with its quinquennial plan, China’s leadership is also aiming to raise per-capita GDP from roughly US$14,000 in 2025 to between US$25,000 and US$30,000 by 2035—an ambitious target implying sustained annual nominal GDP growth of about 4.5–5% and a stable or appreciating renminbi.

The ambition is no longer to ‘catch up’ but to ‘arrive’ by consolidating the country's gains, fortifying its systems, and shaping the next stage of global development on its own terms.

The stakes, as analysts note, are also immense for a world economy that has come to depend on China as a central engine of growth and stability.

From quantity to quality

The plan’s conceptual architecture reframes growth around three core axes: innovation, domestic demand, and equity.

Einar Tangen, Senior Fellow of the Taihe Institute and Chair of Asia Narratives Substack, defines the moment as “not a collection of disparate goals but an integrated system designed to navigate a complex global environment and achieve the overarching mission of socialist modernisation by 2035.”

China acknowledges that the era of input-driven growth (capital + labour + land) has peaked.

Total factor productivity (TFP) growth slipped to about 1.9% annually in 2010–19, down from 3–4% in the 2000s. The new plan pivots to science + technology + industrial upgrading as its engine.

Business firms, including UBS, forecast R&D spending to grow at >7% CAGR, lifting R&D/GDP over 3.2% by 2030. China already invests ~2.7% of GDP in R&D and is home to global-leading industrial clusters in EVs, batteries, solar, semiconductors, and advanced manufacturing.

Experts see a shift from accumulating relative surplus-value by raising labour input toward raising the productivity of living labour itself through technical metamorphosis of the production process. In business-school terms, China is turning the production function upward via innovation-driven multiplier effects.

Demand rebalancing

China’s consumption share remains relatively low as its household final consumption stood at ~39.6% of GDP in 2023, well beneath advanced-economy norms of ~55–65%.

The 15th Plan places raising the consumption share at the heart of demand-side reform.

UBS Group highlights policies that link income growth with social welfare investment—health, pensions, and rural revitalisation—and expects China to hold household income growth at par with GDP growth.
Structurally, boosting household incomes and consumption sets off two reinforcing cycles: as people spend more, service industries grow and upgrade, which raises wages and fuels even greater demand.

It is a domestic-circulation engine mitigating external shocks and export dependency.
As Tangen notes, “innovation drives productivity, which supports investment and higher wages, fueling consumption… sustaining the legitimacy for continued reform.”

Regional equity

China’s trajectory is not only about aggregate numbers but about who is lifted.

Many interior provinces still do not resemble high-income economies: in 2024, Beijing’s per-capita GDP approached ~$31,700 while Gansu’s was around ~$7,300. The plan’s emphasis on rural revitalisation, regional convergence, and common prosperity ensures that growth is inclusive, solidifying political stability and broad-based demand.

Bridging the “principal contradiction” of unbalanced development is part of building a socialist modernity, one that does not replicate the bifurcated societies of many late-industrialisers.

The plan also advances “high-quality development” through spatial convergence, narrowing gaps between urban and rural areas, and between coastal and inland regions.

Urban residents already account for 66.2% of the population, and expanding urban residency rights (hukou) for rural migrants will improve productivity and wages.

For the world

For China, achieving high-income status converts its modernisation narrative into political legitimacy.
It deepens the fiscal base (higher incomes → taxes + consumption) and lessens over-reliance on real-estate-driven investment. It marks a decisive exit from the middle-income trap into advanced-economy territory.

For the world, China’s rise to about US$25,000–30,000 per capita would have far-reaching consequences. A 1.4-billion-strong domestic market with steadily rising incomes would remain a major engine of global demand, drawing in exports of raw materials, capital goods, and services.

Already contributing around 30% of global growth, China’s role as the anchor of world expansion is set to deepen. Its dominance in green technologies will further accelerate the global transition.

As the leading producer of solar panels—responsible for roughly 80% of global output—and a powerhouse in electric-vehicle exports, China’s advances are driving down the cost of decarbonisation and making clean energy more accessible to developing economies.

Alongside this, its model of state-directed, high-tech modernisation—the so-called “Beijing Consensus”—is emerging as a credible alternative to the market-fundamentalist prescriptions of the past, showing that planning and innovation can reinforce each other.

As China builds strength in semiconductors, AI, 5G/6G, and industrial software, it is also gaining influence over global standards and supply-chain architecture.

Can China make the leap?

The goal is ambitious but realistic. Achieving US$25,000–30,000 per person by 2035 means roughly doubling nominal income in a decade.

UBS estimates this would require 6–8% growth in dollar terms, or about 4.5–5% real growth annually—well within China’s demonstrated capacity.

The country’s average growth of around 5.5% during 2021–24 provides a solid base for the next stage.
While the property sector is adjusting after years of rapid expansion, Beijing’s policies now focus on redirecting resources toward manufacturing, technology, and green industries, easing the transition.

Demographic change may reshape the labour force, but productivity gains from automation, digitalisation, and education reforms are already offsetting much of the impact.

External frictions, whether in trade or technology, continue, but the dual-circulation framework has strengthened China’s resilience by deepening its domestic market while keeping global linkages open.
The country’s institutional coordination allows the state, market, and society to align around long-term goals, a strength that few nations can match.

Its technological leadership in EVs, solar energy, and advanced infrastructure already sets global benchmarks. A vast internal market provides flexibility for swift policy adjustment, while partnerships across the Global South ensure enduring access to markets, energy, and investment opportunities.

China’s trajectory is not without hurdles, but its direction is unmistakably forward. What lies ahead is less a question of whether it can sustain growth, and more of how it will redefine the very meaning of modern development in the twenty-first century.

The forecasts lend empirical weight to the ambition as only 4.5–5% real growth, combined with policy upgrades, is enough to reach high-income status.

There are clear risks ahead, but China is arguably better positioned than many nations at similar income levels to manage these headwinds.

If China rises to ~$25–30k per capita by 2035, it will not simply have “caught up,” and will have transformed its economy, society, and global role.

For the rest of the world, a prosperous China means a larger market, more affordable technologies, and a development model that many can emulate or engage with.

The next decade is thus a vital window for China’s future as well as for global modernisation itself.