Potential tappers of complementarity

China’s 15th Five-Year Plan and ASEAN’s Economic Community Strategic Plan (2026-30) are highly aligned

China’s 15th Five-Year Plan (2026-30) for National Economic and Social Development is emerging as China’s most strategically important — and technologically ambitious — planning cycle since the early reform era. It is being drafted under two constraints Beijing increasingly treats as structural. Externally, United States-led pressure is tightening through advanced semiconductor controls, restrictions on AI-related technology and broader efforts to fragment or “de-risk” supply chains. Internally, China faces a narrower growth corridor shaped by aging demographics, elevated debt and a prolonged real estate downcycle. The combined effect is a shift away from a “catch-up+scale” model powered by rapid capacity expansion and factor inputs, toward “self-reliant innovation+structural resilience”: climbing the technology ladder while reducing vulnerability to external choke points and shocks.

Technological self-reliance sits at the center of this shift. The logic is clear. If access to frontier technology cannot be assumed, China must build endogenous capability in basic research, indigenous chip ecosystems, industrial software and original innovation, especially in “bottleneck technologies” that can be weaponized by the West through export controls. This is not a narrow tech agenda; it is the economic spine of the plan and increasingly the bridge between economic policy and national security policy.

That logic also drives a large-scale push to digitize and green traditional industries. China’s leadership is signaling that productivity gains will not come from “more land, more labor, more credit”, but from upgrading the existing industrial base — process by process, factory by factory, supply chain by supply chain. In practice, this means industrial modernization, automation, data-driven operations, cleaner energy inputs and more efficient logistics, alongside tighter attention to industrial standards and domestic supplier ecosystems.

Domestic demand is to be elevated in parallel, especially household consumption, but within a framework that prioritizes risk control. The new plan is expected to stress resilience through supply-chain diversification and import substitution in critical materials and components. The overall posture is preparation for long rivalry and high-quality growth.

The 2025 Central Economic Work Conference, held on Dec 10 and 11 in Beijing, reinforced this orientation through continuity rather than escalation. The macro stance implied is calibrated rather than maximalist: stimulus will be cautious rather than “shock therapy”; there is no sign of a dramatic currency regime shift; and policy rhetoric leans toward confidence, structural reform and medium-term transformation rather than chasing short-term headline growth. Fiscal policy is described as “more proactive” but bounded by discipline; monetary policy as “moderately loose”, with room to adjust reserve requirements and rates, yet anchored by a preference for the stability of the renminbi. Crucially, the slowdown is framed as a developmental transition challenge, suggesting targeted interventions rather than an all-out macro pivot.

At present, China is like a marathon runner with muscle cramps. The short-term pain of the housing market and weak domestic demand are not fatal like a heart attack. After a brief period of limping and massaging the muscle, the runner will start to get stronger. In the meantime, the present reduction in tensions with the US helps to improve overall sentiment and confidence. After another one or two years, the consistent focus on sectors such as electric vehicles, batteries, solar and wind energy, advanced manufacturing, and segments of the AI and chip industries will become strong engines of growth over the next two decades.

This is where the Association of Southeast Asian Nations’ agenda for the next five years becomes strategically relevant. ASEAN is pursuing deeper integration, resilience, digital transformation, sustainability and upgraded value-chain positioning. China’s 15th Five-Year Plan is focused on innovation-led upgrading, strategic emerging industries (notably clean-tech and advanced manufacturing), “Digital China” and institutionalized openness — particularly in services and new forms of trade. The underlying logic of the two agendas creates real space for complementarity if managed with discipline and guardrails.

ASEAN’s operational targets sharpen the point. The ASEAN Economic Community Strategic Plan 2026-30 emphasizes single-market integration, sustainability, innovation and digitalization, global partnerships, resilience (including supply chains) and inclusion. ASEAN’s energy transition goals — the scaling of renewables, energy-intensity reduction and grid modernization — function as binding constraints on infrastructure choices, financing needs, standards and competitiveness. In that sense, decarbonization is not only an environmental project; it is an industrial strategy that will determine where investment flows and which companies win.

A useful shorthand for the 2026-30 period is that ASEAN is pursuing “integration+resilience+upgrading”, while China is pursuing “innovation-led upgrading+security+institutionalized openness”. Done well, these priorities can interlock. ASEAN offers diversification space — labor pools, industrial parks and “China+1” ecosystems — plus proximity that reduces logistics friction. China offers capital goods, engineering depth, dense supplier networks and scale-based cost advantages in clean-tech equipment and advanced manufacturing tools. If sequenced intelligently, this pairing can help ASEAN move beyond assembly into component ecosystems, process know-how and higher-value services around manufacturing — testing, maintenance, logistics and digital operations.

The green transition is the clearest arena for mutual gain. ASEAN needs rapid decarbonization while maintaining energy security and affordability. China’s plan foregrounds new energy, new materials and strategic emerging industries. China’s clean-tech manufacturing depth can lower ASEAN’s transition costs in renewables, storage and EV supply chains, while ASEAN’s deployment needs align with the at-scale execution capabilities that Chinese companies have established.

ASEAN frames digital as a growth engine and stresses openness, interoperability, trust and security. China is elevating “Digital China” and next-wave technologies. The complementary zone is large. Industrial digitization can raise productivity across ASEAN manufacturing, while cross-border e-commerce, logistics and payments connectivity can support ASEAN’s single-market ambition. Yet ASEAN will face pressure to choose standards, governance models and vendor ecosystems in a more bifurcated tech environment. The challenge is to capture efficiency gains without sacrificing interoperability, regulatory sovereignty or cyber resilience.

Critical minerals and “sustainable extractives” form another intersection. ASEAN’s agenda includes resilient supply chains and improved governance of extractive industries; China’s strategy emphasizes “new materials” and scaling strategic emerging industries. ASEAN’s resource endowments — nickel, copper, bauxite and rare-earth potential in some members — can plug into China’s materials-intensive green and high-tech push, while China can bring processing know-how and downstream demand. The governance test is whether this becomes a value-adding partnership — refining, precursors, components — or a commodity trap.

Complementarity, however, is not the same as harmony. “China’s export pressure” can be a real competitive dynamic — especially if soft demand and strong capacity in China intensify price competition in ASEAN markets — but domestic governance can amplify shocks: unstable import rules, uneven customs enforcement and regulatory arbitrage may turn competition into a legitimacy problem.

China is building a resilient, innovation-driven economy for an era of constraint; ASEAN is integrating while upgrading under climate, digital and security pressures. The complementarities — in green hardware, industrial digitization, supply-chain diversification, minerals and services — are real. But durable gains require rules, standards and capability-transfer mechanisms that keep cooperation economically productive and politically sustainable. That calls for dialogue and negotiations.

The author is a professor of economics at Nanyang Technological University in Singapore.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.