China seeks to enhance rare earth advantages, take 'extraordinary measures' to achieve semiconductor breakthroughs — new five-year plan marks doubling down on technological self-reliance

China has just released the latest draft of its 5-year plan, which is set to be approved during the next full session of the National People’s Congress from March 5 to 12, 2026. This document lays out the plans and policies that the central government will implement in the next half decade — and reveals how Beijing intends to react to the ongoing trade war and tech rivalry with Washington.

According to Nikkei Asia, the government is concerned with the ongoing instability in international relations and is taking steps to insulate itself. “The balance of international power is undergoing profound adjustments. Geopolitical conflicts are more frequent and widespread, the global governance deficit is widening, and security issues are becoming more prominent,” the document said.

Some of the key policies set in the draft 5-year plan included building a more robust “response mechanism” to enhance its supply chain security and enhancing its “competitive advantages in rare earths.” This is the biggest issue China has encountered so far in its drive for technological superiority.

The U.S. has been applying export controls to several critical technologies that the country needs, like Nvidia’s and AMD’s latest AI chips, as well as ASML’s photolithography machines, which chipmakers need to make the most advanced semiconductors. On the other hand, Beijing now requires export licenses for rare earth materials, making it harder for tech companies and semiconductor manufacturers to acquire these minerals that are crucial to making the highest-end chips.

Beyond supply chain issues, Beijing promises to prioritize research and development, with the 5-year plan calling to increase investment in domestic innovation by 7% or more annually. Although this might seem like an ambitious goal, it actually continues the target set during the previous 5-year plan, which is seemingly returning dividends for the country.

More than that, the plan adds that China will take “extraordinary measures” in several crucial areas, including semiconductors, industrial machinery, and advanced materials. It also mentioned a push on humanoid AI robots, focusing on integrating “the brain and cerebrum,” as well as the establishment of hundreds of vocational institutions to train Chinese citizens on strategic industries like artificial intelligence.

These policies show what Beijing plans to prioritize in the next five years, especially when it comes to technology. As the rivalry between the U.S. and China is heating up, the Chinese government knows that it must continue the steps it’s taking to decouple from Washington and gain independence, especially when it comes to technology — and we see how it plans to accomplish this through 2030 with its 15th five-year plan.

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