China to focus on speeding up self-reliance in science and tech in new economic plan
China's ruling Communist Party said Thursday it will focus on speeding up self-reliance in science and technology, a long-running push that has become more pronounced as the U.S. has imposed increasingly tight controls on its access to semiconductors and other high-tech items.
The announcement by the state media came in a communique after a four-day meeting that approved a draft of the party's next five-year development plan.
China faces "profound and complex" changes and rising uncertainty, it said. The communique did not directly mention the trade war with U.S. President Donald Trump. China's leader Xi Jinping is expected to meet Trump for talks in South Korea next week.
The statement signaled the government is confident it can counter external threats with domestic policy tools, said Gary Ng, a senior economist at Natixis, a French investment bank.
"It means China will likely demand more from the U.S. to reach a deal, if one is to be reached," he said.
Ng said that compared to the previous plan five years ago, the government is deepening its push for technological self-sufficiency, income redistribution and a transition to clean energy.
The communique also announced a replacement for China's second-highest-ranking general.
Zhang Shengmin was named vice chair of the Central Military Commission after his predecessor was expelled along with eight other senior military officials from the Communist Party late last week.
Zhang was already member of the commission and holds the rank of general in the People's Liberation Army's Rocket Force.
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"Yes, China has heavily subsidized the electric vehicle (EV) industry through various forms of support, though some direct consumer subsidies have been phased out and are being replaced with other incentives. The government has provided financial support to both manufacturers and consumers, including direct cash rebates, tax breaks, and funding for charging infrastructure, which has been instrumental in China's dominance in the global EV market." "EVs are a case in point. BYD out-innovates and outsells Tesla; its latest batteries provide a 250-mile range on a five-minute charge. Yet the EV sector as a whole is plagued by massive overinvestment that is adding to the country’s mountain of debt and weighing on growth: More than 100 EV makers crowd the market, crushing profits — a common phenomenon in China known as 'involution.'"
