What does China’s upcoming 15th Five Year Plan mean for its plans for global leadership in AI? Five questions with Benjamin Qiu

As part of our series of interviews with leading policy experts, CSRI is pleased to have Benjamin Qiu with whom we discussed the likely outcomes of the Fourth Plenum,  the upcoming 15th Five Year Plan, and the impact this  will have on China’s Artificial Intelligence (AI) sector . 

The following is a transcription of CSRI's conversation with Benjamin. Some minor adjustments have been made for clarity and style.

This interview took place on 28 October 2025

1.

What do you think the Fourth Plenum’s most important outcome is likely to be, particularly for the upcoming 15th Five Year Plan?

Ten years ago, few people outside of a small circle of China watchers were paying attention to the launch of Made in China 2025. Today, there are few days that go by where this industrial policy is not referenced in the press or cited as the reason why China has come to dominate so many emerging sectors and at the same time significantly reduced its reliance on the rest of the world.

As the Chinese Communist Party (CCP) leadership begins to publish the outcomes of the Fourth Plenum (which took place earlier this month) where it finalised China’s economic and social development from 2026 to 2030, every government in the world, as well as global financial institutions, will pay close attention to try and detect what these plans mean for China’s geopolitical competition with the U.S., which is heavily grounded in a race to dominate artificial intelligence (AI) and other emerging technologies of the future. 

It is highly likely that at the heart of the 15th Five-Year Plan, the CCP will prioritize increased investments in technology, innovation, and security, which would encompass technological self-reliance, and AI-assisted manufacturing and defense. Xi Jinping’s latest industrial policy priority has been the much vaunted  “new quality productive force (新质生产力)”. Decoded, this means technologies that pose no threat to state-owned firms, the Chinese Communist Party’s control of them, or the Party’s grip of power, but may stand to disrupt foreign competitors or markets.  At the moment, his favorite ones appear to be AI, robotics, semiconductors, and the “new energy” industry, i.e., electric vehicles and batteries. Coupled with China’s dominance over key aspects of supply chains, such as its stranglehold over rare earths, and its strengthening military-industrial complex, Beijing aims to prevail in the technological competition with the US and its allies.

2. 

In your view, why is AI so central to China’s industrial policies? 

Beijing’s primary objective is to use AI as a solution, or at least a relief, to the Party’s, and particularly Xi Jinping’s political legitimacy deficit. Other important goals – to achieve AI supremacy, adopt AI industrial use, and AI’s compliance with Party ideology – should be understood as secondary ones that serve the main objective.   

Under Xi, China is reaching a political and economic dead end. Xi cannot claim the main credit for the country’s industrial strength, primarily in the forms of infrastructure, supply chains, high-end manufacturing, and the export economy, because those took shape before Xi came to power. On the other hand, all aspects of the current economic downturn, be it unemployment, deflation, local government debt, the collapse of the real estate market, and industrial overcapacity, became acute on his watch. In addition, there is little doubt that Xi is responsible for the general deterioration of relationships with democratic governments.  

However, with AI’s potential of boosting economic output at an unimaginable scale, Xi’s government has spotted an opportunity and seeks legitimacy based on China’s AI development and deployment under his leadership. This includes: 

One, proving that China’s open-source models, such as that of DeepSeek, is superior to the western companies’ predominantly proprietary models. 

Two, establishing a semiconductor supply-chain that is independent of that of the U.S. and its allies. That could explain why despite the apparent importance of the Nvidia chips to China’s AI industry, Beijing has taken a number of actions against Nvidia, as these tend to benefit domestic semiconductor champions, such as Huawei.And last but not least, achieving a high level of consumer-military fusion or dual-use of AI technology, especially when it comes to the applications in the physical environment  (robots, drones, autonomous vehicles) and AI-assisted war-time decision making. The military-related AI deployment goals have been repeated set out by the central government, including in the State Counsel announcements in 2017 and 2025 (国发(2017)35号，国 务院关于印发新一代人工智能发展规划的通知, 国发(2025)11号，国务院关于深入实施“人工智能”行动的意见).   

3. 

What is the central challenge you see China facing when it comes to achieving global leadership in AI development? 

The biggest challenge to continued AI innovation in China, is the difficulty with attracting and retaining innovative or entrepreneurial talent, and maintaining their morale. 

If General Secretary Xi crossed a Rubicon by bringing together Vladimir Putin and Kim Jong Un – as well as the leadership in Tehran – to discuss recasting the international global order, he previously has crossed the Rubicon many times over during his rule in the view of China’s business owners who have faced crackdowns. 

After rounding up insubordinate activists and lawyers in 2012-2013, Xi Jinping targeted business owners who refused to align their interests with the Chinese Communist Party. The persecution of Ren Zhiqiang, a real estate tycoon, and Sun Dawu, a prominent industrialist, are well-known. Those were swiftly followed by crackdowns on technology companies, including fintech, online education, mobile internet and e-commerce, as well as the entrepreneurs and bankers who facilitated the rise of such companies.

To non-governmental stakeholders in the Chinese economy, the sharp turn towards ideology, coupled with Xi’s apparent determination to rule indefinitely by one-man decrees, sends a strong signal to sell. News about the Chinese entrepreneurs in 2025 tends to cover their disappearance (or the occasional re-appearance, such as that of Fan Bao, a banker, or Jack Ma, the founder of Alibaba) or their committing suicide, rather than wealth-creation. The number of launches of new companies in Mainland China has plunged, as has been well reported. 

4. 

Outside of the retention of talent, what are the other challenges you foresee China facing in  AI development? 

The demoralized talent aside, other factors that are less fatal, but still significant, stand to limit the rise of China’s AI:

Due to the deteriorating relations with the democratic world, especially with the U.S., foreign investors, especially USD-denominated venture capital (VC) funds, have generally stopped investing in China’s technology sector. This  means the deep-pocketed foreign investors (pension funds, endowment funds, asset managers, high-net-worth individuals, etc.) who used to invest in China’s tech either directly or through the VCs, are no longer helping China’s still-fledgling AI industry with their access to international capital, technology, or human relationships. 

Furthermore, the U.S. government and its allies have introduced additional technology export restrictions, as well as hurdles to investing in Chinese companies. As a result, the IPOs of high-quality China-based tech companies in the U.S. have declined, denying them access to the deepest public capital market. 

Similarly, as a result of the undeniable economic downturn in China, the local governments, their investment vehicles, and the state-owned firms under their control, can no longer easily afford to provide generous resources to incentivize the AI startups, or to subsidize mature AI companies as they did before.  

5. 

What are your final thoughts on the Fourth Plenum that took place this month and what it means for China’s AI development?

Without a structural fix for the political legitimacy deficit, Xi’s regime will continue to rely on industrial policies and trade to solve all its problems. But being a manufacturing superpower is not the same as being a technological one, let alone one that is capable of continued innovations. 

The question is whether the Fourth Plenum will outline a concrete plan through AI which will allow China to gain the upper hand in the next wave of innovation in mobility, clean technology, and defense. The details of the 15th Five-Year Plan are expected to be released in March 2026.

China’s growth model copied from Japan and Taiwan has run its course. Yet Xi has previously chosen to double down on mercantilism, which has already reached its limits and is inviting backlash. 

Beijing has therefore seized upon AI as an opportunity. But Xi has limited choices if he insists that the Party shall continue to monopolize power. AI is unlikely to be the cure or rescue, and its western competitors can hurry along its decline simply by picking up the best talent fleeing the country, especially in the event of any social turmoil.

Benjamin Qiu is a highly experienced legal professional with nearly two decades of expertise in cross-border transactions, specializing in U.S. and China-related venture capital financing, fund management, corporate governance, and intellectual property strategy. He advises clients in dealings with Chinese partners and contributes to digital privacy, civil rights, and China-related legal and political risks. He has also lectured at the Ignite program of Stanford Graduate School of Business on capital markets and intellectual property.