BEIJING (Reuters) -China's Communist Party elite vowed on Thursday to build a modern industrial system and make more efforts to achieve technological self-reliance, moves it sees as key to bolstering its position in its intensifying rivalry with the United States.
As expected, the Party's Central Committee also promised more efforts to expand domestic demand and improve people's livelihoods - long-standing goals that in recent years have been little more than an afterthought as China prioritised manufacturing
and investment - without giving many details.
In addition to mapping out economic and other policy objectives for the next five years, Party leaders during the four-day closed door meeting also replaced 11 members - the highest personnel turnover since 2017 amid an ongoing military corruption purge.
The Chinese economy's overreliance on exports at a time of heightened trade tensions with Washington might push Beijing to find a better policy balance in coming years, although analysts expect efforts to be slow.
A communique reported by state news agency Xinhua after the meeting, known as a plenum, outlined China's priorities in its next five-year development plan. Details and an annual growth target, which will be closely watched by global investors, will only be released at a parliamentary meeting in March.
Building "a modern industrial system with advanced manufacturing as the backbone" and accelerating "high-level scientific and technological self-reliance" were listed ahead of the development of "a strong domestic market," the communique showed.
"The thinking is still focusing on the supply-side," said Tianchen Xu, senior economist at the Economist Intelligence Unit, referring to Beijing's traditional playbook of channeling resources to investment and manufacturing, bypassing households.
China's economic growth slowed to its weakest pace in a year in the third quarter and investment posted its first non-Covid decline as fragile domestic demand left it heavily reliant on the unexpected humming of its export factories despite U.S. tariffs, stoking concerns about government efforts to address long-standing and deepening structural imbalances.
The communique said Beijing will strive to improve people's welfare and the social security system, but did not provide details on how Beijing intends to achieve that or where the funds would come from.
Uncertainty over the timing, funding and size of such medium and longer-term policies are adding to economists' and investors' worries over the government's ability to rebalance an economy in which household consumption lags global averages by about 20 percentage points of GDP.
One spotlight is they vowed to "invest in people", Xu said, expecting measures to better protect people's rights and interests and improve the social insurance system.
"Policymakers may increase the medical insurance and pension for the elderly in rural areas, but they may not have a clear idea on how to do that for now."
China's forceful industrial policies have built sophisticated supply chains in many manufacturing sectors but have also led to rampant overcapacity, feeding deflationary pressures as companies cut costs and jobs to stay afloat.
Still, that global dominance in many sectors has given Beijing confidence in its trade war with the U.S., whose President Donald Trump is threatening triple-digit tariffs.
Such policies have given Beijing a near-monopoly in rare earths production, indispensable to global defence and semiconductor industries, and major leverage in expected trade talks between Trump and Chinese President Xi Jinping this month.
China is a leading carmaker and producer of solar panels and wind turbines, and has ambitions in artificial intelligence, robotics, biotech and other emerging industries that its policy documents refer to as "new productive forces."
(Reporting by Beijing Newsroom;Editing by Ros Russell and Kim Coghill)
