- The foundation for this plan is a tremendously ambitious increase in digital infrastructure and connectivity. Targets include a tenfold increase in the number of Chinese households connected to broadband with speeds of at least 1 gigabyte per second and an almost four-fold increase in 5G user adoption rate.
- The plan puts forward a bold industrial policy strategy to improve self-sufficiency and secure supply chains in “core technologies” such as hardware, electronic components, 5G, or artificial intelligence. To encourage the development of these technologies, it aims to increase R&D investment intensity (ratio to operating income) in the computer, telecommunications and electronic equipment industries by 36 percent in 2025, from 2.35 to 3.2 percent.
- E-government and improved governance through digital technologies are also among the policy priorities laid out in this plan. It aims to more than double the e-social security card application rate and almost double the e-litigation rate, and calls for better sharing and circulation of government data. Towards the rest of the world, the government plans to increase its sway over global cyberspace governance system and norms.
- Although the plan lays out an ambitious target for increasing online retail, the plan clearly emphasizes industrial applications rather than consumer Internet. While “consumers” and “retail” are both mentioned only three times in the document, “industrial” is mentioned 78 times and “core technologies” 20 times.
- The plan also insists on making digital technologies serve the “real economy”. This does not bode well for China’s battered consumer platforms, already hit by a heavy regulatory crackdown last year. Chinese leaders are seeking to rebalance the digital economy from consumer Internet, in which its enterprises are world leaders, towards “hard” technology and industrial sectors, in which they are lagging behind.
- Lastly, the Cyberspace Administration of China, parent of the Central Commission for Cybersecurity and Informatization, emerges as the powerful administration coordinating all matters related to digital policy, from cybersecurity to digital industrial policy.
- Foreign companies can use this 14th Five-Year-Plan as an indicator of state priorities for years to come, and therefore as a pointer of what sectors in the Chinese market to focus on and invest into.
Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in China.