By Eduardo Baptista and Laurie Chen
BEIJING, March 2 (Reuters) – China will this week unveil how it plans to advance the next phase of the technology race with the West and transform a wave of high-profile Chinese breakthroughs. artificial intelligenceaerospace and robotics to industrial scale and capital market momentum.
The country’s top leadership will release the annual government work report and budget plans at the opening session of the National People’s Congress (NPC), China’s interim parliament, on Thursday, as well as the draft of the 15th Five-Year Plan for 2026-2030, a comprehensive plan that sets priorities for industrial policy.
The reports lay out Beijing’s priorities and show which sectors it will favor with generous financing and policy support.
Last year, when artificial intelligence models were first mentioned, embodied intelligence, the technology that powers humanoid robots, was also highlighted.
AI AFTER ‘SHOCK’
The NPC comes weeks before a meeting between Chinese President Xi Jinping and U.S. President Donald Trump, scheduled for March 31 through April 2, where technology controls and supply chains are expected to feature prominently.
It also marks a year since Chinese AI developers gained global attention for sudden leaps in capabilities, despite tight U.S. restrictions on access to advanced chips and chip-making equipment.
Chinese startup DeepSeek, whose viral artificial intelligence model launch last year triggered a sell-off in global tech stocks and reshaped assumptions about China’s tech competitiveness against the US, is expected to launch a next-generation model in the coming days.
“The shock is over,” said Alfredo Montufar-Helu, managing director of Ankura Consulting in Beijing. “There is now an expectation of what China might do next.”
The challenge for Beijing is how to translate individual breakthroughs into systematic, large-scale gains in manufacturing, logistics and energy.
Shujing He, a senior analyst at consultancy firm Plenum China, said policymakers will likely promote “AI plus manufacturing” by drawing startups and specialized suppliers into the real world, using large state-owned enterprises as key adopters.
However, this strategy is also expected to reshape China’s industrial structure.
Shin Nakamura, president of Japanese manufacturer Daiwa Steel Tube Industries, said China’s AI push will likely benefit large, capital-intensive manufacturers that can afford the cost of distribution, while smaller firms will face structural constraints.
“The gap between large enterprises and SMEs in China will widen and consolidation will accelerate,” he said.
HUMANIDS AND SPACE
The five-year plan is also expected to double embodied intelligence.
The country showcased its advances in the arena last month by putting Chinese-made humanoid robots performing dance and martial arts center stage at the annual CCTV Spring Festival gala, China’s most-watched TV show.
Major leaps in hardware technology underpin China’s confidence in robotics.
“Mechatronics – particularly balance, motor control and dynamic movement – have improved significantly over the last 12 months,” said Mike Nielsen, a principal at computer vision firm RealSense, which works closely with China’s leading robotics company Unitree. “China has shown great momentum, with early-stage platforms now showing much higher agility and stability.”
But Chinese regulators also warn that differentiation among the more than 150 domestic humanoid robot developers is low, and analysts say consolidation is likely to occur faster than in previously strategic sectors such as electric vehicles.
Space is another example of Beijing’s push to transform research into industrial power. Private launch firm LandSpace said it is planning another recovery attempt for its reusable Zhuque-3 rocket this year, after becoming the first Chinese company to conduct a full test of its orbital-class reusable launcher in December.
In its January report, US research company Rhodium Group stated that despite all these exaggerated expectations, China’s developing sectors will not be able to generate enough investment for 5 percent growth in GDP in the coming years, and suggested that Beijing will continue to rely on exports to support its economy.
According to Plenum’s He, this also means that Beijing will prioritize sectors with faster commercial impact, such as autonomous driving.
SUPPLY CHAINS AND LEVERAGE
Analysts say the five-year plan will also be scrutinized for how it plans to protect industrial bases under Beijing’s technology push as supply chains become tools of geopolitical pressure.
Last year, China expanded export controls to rare earth elements and low-quality semiconductors, disrupting global supply chains and underscoring Beijing’s economic power.
China’s State Council and industry ministry did not respond to requests for comment.
Other supply chains vital to the global economy are vulnerable to dependencies on China, according to Doug Friedman, CEO of US biomanufacturing institute BioMADE.
“What we see with rare earth elements is also happening in the industrial chemical industry,” Friedman said.
As Beijing determines its next five-year industrial strategy, Friedman said the risks are becoming clearer.
“We are neck and neck right now,” he said, referring to the United States and China. “Whoever doubles down in the next three to five years will have real leadership.”
(Reporting by Eduardo Baptista and Laurie Chen; Editing by Brenda Goh and Muralikumar Anantharaman)
