“Mao Zedong brought China back on its feet, Deng Xiaoping made her rich and Xi Jinping he made her strong.” He didn’t use those exact words, but that’s exactly what the Chinese president meant when in 2017 he harangued the party at the dawn of his second term. Exactly fifty years after the death of Great Helmsman, Xi’s ambitions for the nation enter a new phase. The next twelve months will be crucial for the People’s Republic.
Il 2026 will mark the start of the new five-year plan, the political-economic strategy with which Beijing aims to make a great leap forward towards “socialist modernization”. Which translated means transforming China into a “medium development country”, doubling the Pro capite pills of 2020 by 2035, and then making it “a modern, prosperous, strong, democratic, culturally advanced and harmonious socialist country” before 2049. Just in time for the centenary of the People’s Republic. A goal that – according to official press releases – will require a growth rate of at least 4.17% over the next decade.
It won’t be easy. The international context does not facilitate the work of the Chinese government: the truce with the United States is far from solid while tensions with the European Union they look set to become the new normal. Looking to the Global South may not be enough to compensate for the growing closure of Western markets.
The text of the plan, presented in October during the IV Plenum of the partywill be ratified during the plenary session of parliament, expected in March. But the bulk of it is already known. According to the roadmap, the focus will be on greater technological self-sufficiency, as well as better coordination between internal and external circulation, i.e. between the domestic market and international trade. Consumption, especially in services, remains the guiding star. The economic “lifesaver” that the Chinese leadership considers indispensable in the context of trade tensions with the United States and the European Union. But now the intention is to work more on supply by regulating the sectors affected by overcapacity productivesuch as automotive and renewables.
For those who follow China, this is nothing particularly new. Beijing has been moving in this direction since the immediate post-Covid period. If it were not for the unprecedented emphasis placed on the need to build a modern industrial system. According to the financial magazine Caixin“maintain a reasonable share” of the manufacturing sector, transforming advanced manufacturing throughhi-tech (the so-called “new productive forces”), will make it possible to avoid the “emptying out of industry experienced by some important economies”. Especially in light of real estate crisis which, until the bubble burst in 2023, represented around 30% of the national GDP. Although the measures adopted so far have cushioned the decline in house prices, to former Finance Minister Lou Jiwei, the sector will continue to go through a phase of instability for at least another five years, slowing growth.
As always in times of uncertainty, the Party-State closes ranks. Next year will be marked by new appointments in view of the XXI Congress of the CCP. The meeting, which will be held in autumn 2027, will mark the end of Xi Jinping’s historic third term. In all likelihood also the beginning of a quarter. With no signs of a favorite to succeed, one might expect a further consolidation of his power, both through internal purges both with the rise of the protected in top positions. According to the state news agency Xinhuain 2025 the anti-corruption campaign targeted numerous officials, including at least five at ministerial level. The military was one of the main targets of the cleanup. In October, just before the fourth plenum, nine senior officers they were removed from the party for violations of discipline. He Weidongvice-president of the CMC, became the first Politburo member since 2017 to be investigated while still in office.
Considering that “political rectification” appears among the objectives of the new five-year plan, it is unlikely that the army will have more breathing space next year. Also because time is running out: il 2027 in fact it not only coincides with the centenary of the Chinese armed forces. Above all, it is the year in which, according to the Chinese president’s plans, Beijing must have obtained the ability – if it wants – to reconquer Taiwan military hand. Ability which, even after the massive exercises at the end of December, is still largely to be demonstrated.
Against American odds, it is unlikely that China will raise its game too much. The removals of the corrupt military – many of them linked to the province of Fujian overlooking Taiwan – may require a rethink of the muscular strategy implemented so far in the Strait. Not to mention that local elections will be held on the island in 2026. It may be more prudent for China to leave President William Lai cook in its broth to take advantage of the unpopularity of some policies that they should have affected the nationalists of the Guomindang and Beijing, but which instead cast dark shadows on the Democratic Progressive Party and the state of Taiwanese democracy.
On the other hand, the Taiwan card should not be wasted, it must be played with cunning. The coming year will in fact be the year of the trade agreement so desired by Donald Trump. It is not excluded that Beijing could try to exploit the pragmatism of the American president to obtain some compromise. Maybe an official opposition of Washington to the island’s independence in exchange for a fast track to supplies of critical minerals. At the time of writing, the signature is still missing, but it is already known that the truce on rare earths and mutual economic retaliation will last a year, with the possibility of extension only after periodic checks. In the coming months, it will be up to leaders to overcome the remaining obstacles. Furthermore, there is no shortage of meeting opportunities. According to the Treasury Secretary Scott Bessentin addition to the respective two state visits, in 2026 Xi and Trump they should also cross paths in November during the APEC summit in Shenzhen and in December for the G20 organized by The Donald at the Doral Golf Club in Miami.
Diplomacy at work also in Europe, where economic measures are planned to make relations with the People’s Republic more balanced. Again from the perspective of the now consolidated “de-risking”: duties for low-cost e-commerce, a screening mechanism for foreign investments, and a strategy to ease dependence on Chinese rare earths stand at the top of the list of priorities of Bruxelles. And then there is the thorny issue of electric vehicles, already subject to tariff limitations. Obviously, the Ukraine dossier adds to the complication of the situation. The People’s Republic does not appear willing to actively mediate a resolution to the conflict, even as Western sanctions are pushing Chinese companies and banks to suspend some economic activities with Russia.
It will therefore be a year dedicated to negotiations with the United States and the EU. But this (or precisely because of this) will not distract Beijing from its “pivot to the Global South”. By now the Chinese leadership has clearly demonstrated its predilection for multilateral tables. Especially those with protagonists the South of the world: the former Third World to which Mao winked and with which today the People’s Republic shares the need to build a more inclusive international order.
The BRICS summit in India will provide the opportunity to move forward the détente process with New Delhithe other giant of the planet’s southern hemisphere. Having tamed tensions along the disputed border, China has benefited from the trade frictions between Trump and the Indian Prime Minister Narendra Modi. A possible trip by Xi to the subcontinent – the first since 2019 – would give greater formality to the normalization of bilateral relations. But it is a fragile truce. Its stability will be tested during the summit of the Shanghai Cooperation Organization, the Sino-Russian-led platform founded in the early 2000s with the Stans, which next year will be hosted by Pakistan. New Delhi has often refused to support joint statements that mention Chinese infrastructure projects passing through Kashmir disputed with Islamabad. A position that could hinder the functioning of the newly formed SCO Development Bank in the future.
In short, there is no shortage of challenges. Now that it is rich and strong, China can stand up to Trump, it can negotiate “equal treaties” with the former imperialist powers. But much of the ostentatious security serves to hide internal weaknesses. We’ll see if after 2026 the grandeur promised by Xi will indeed be a little closer.
Related News :