Xi’s Next Five Years: What the Fourth Plenum Means for China and the United States

This post is excerpted from a report that I co-authored with Lobsang Tsering for the Asia Society Policy Institute’s Center for China Analysis, which also covers purges, process, and elite politics at the Fourth Plenum. Read the full piece here.

What kind of deal does Xi Jinping want with Donald Trump? Twelve hours after the two leaders met in Busan last Thursday, I sat in a New York ballroom packed with hundreds of executives, policymakers, and foreign-affairs experts. When a speaker asked who believed China and the United States would reach a “comprehensive trade deal” by the end of Trump’s term, half the room raised their hands. I was surprised. Beijing is not chasing a grand bargain; it is seeking a truce to buy time and build leverage.

Xi’s diplomatic messaging contrasts with his domestic rhetoric. In South Korea, he told Trump that “China’s development should go hand in hand with your vision to Make America Great Again,” and that “our two countries can totally help each other to succeed and prosper.” In Beijing, at the Fourth Plenum of the Communist Party’s 20th Central Committee, which ran from October 20–23, he called for “upholding the multilateral trading system” but also said China must “win the strategic initiative amid fierce international competition.”

The plenum confirmed Beijing’s continued focus on strengthening self-reliance. It issued authoritative “Proposals” (jianyi 建议) for China’s next five-year plan, which will be drafted by the State Council and released by the National People’s Congress at the Two Sessions next March. As anticipated by the Center for China Analysis (CCA), Xi’s top priorities remain “building a modernized industrial system” and “self-reliance and self-strengthening in science and technology.”

Xi’s bargaining position is strong: the Party reaffirmed its call to “unite more closely around the Central Committee with Comrade Xi Jinping at its core.” Yet politics intruded on the polished optics in an unusually obvious way. State-media cameras could not hide rows of empty seats in the meeting hall — belonging to scores of officials absent because they were dead, disgraced, or under investigation. The image captured a paradox of Xi’s power: complete control, but constant purges.

This article shows how the Fourth Plenum advanced Xi’s drive to build technological self-reliance, tighten political control, and centralize decision-making ahead of the 21st Party Congress in late 2027. The contrast between his conciliatory tone in Busan and his assertive message in Beijing signals confidence, not weakness, and underscores that his economic agenda remains defined by strategic competition with the United States. For Washington, this means hardened industrial rivalry rather than market opening: U.S. firms should expect more state direction, tougher conditions for trade and investment, and continued expansion of China’s export-control regime. Both sides now prize self-reliance over interdependence — but Xi is betting that his strategic resolve will outlast Trump’s.

Mao Zedong once predicted that China would surpass the United States by 2030. In 1955, he declared: “Our goal is to catch up with and surpass the United States … As for how many decades it will take, depending on everyone’s efforts, it will take at least fifty years, perhaps seventy-five, which is fifteen five-year plans. Only when we catch up with and surpass the U.S. can we finally breathe easy.” Mao may have offered this timeline largely for rhetorical effect, but it has not gone unnoticed in China that the five-year plan discussed at the just-concluded Fourth Plenum is the country’s fifteenth.

Both Mao and Xi have voiced wariness about American power. Seventy years ago, Mao said, “we are not in good shape; we are bullied by others.” Two years ago, Xi echoed the sentiment, warning that “Western countries led by the United States have implemented all-round containment, encirclement and suppression of China.” While direct comparisons between the two are historically dubious — Mao embraced disruption; Xi prefers order — each has sought to ensure that no foreign power can obstruct China’s restoration of national pride through wealth and power.

Will Xi fulfill Mao’s dream by 2030? On the standard measure of nominal GDP, it appears unlikely: China’s economy was only 64.2% the size of America’s last year, even though it surpassed the United States on purchasing-power-parity terms in 2014. Still, Xie Maosong, a well-known establishment intellectual at Tsinghua University, recently praised the “strategic foresight” of Mao’s 75-year vision in a commentary on the Fourth Plenum. In his view, the meeting showed Beijing’s growing strategic advantages after its “recent strong and effective countermeasures against the United States.”

Xi is now matching the United States in qualitative rather than quantitative terms. Beijing’s investments in technological self-reliance, industrial supply chains, and an export-control architecture have forced Washington to scale back its toughest threats in exchange for relatively minor concessions. Shortly before the Busan summit, Trump posted on Truth Social that “THE G2 WILL BE CONVENING SHORTLY!” — a telling sign that he increasingly sees Xi as a peer on the world stage.

Xi, however, is not resting on his laurels. According to Xinhua, China’s state news agency, on April 10 the Fourth Plenum’s drafting group convened a “special meeting” to adjust the Party’s five-year-plan proposals in light of “changes in the external situation.” This came eight days after Trump imposed an additional 34% tariff on Chinese imports on “Liberation Day,” two days after he had raised it to 84%, and just one day after his escalation peaked at 125%. The timing, and its disclosure, was no coincidence. Beijing views Trump as an agent of chaos and is preparing for a more turbulent world.

A core principle of Xi Jinping Thought is “bottom-line thinking” — a hyper-sensitivity to worst-case scenarios. His solution is to deepen indigenous innovation and reduce external dependencies. Little surprise, then, that continuity was the key policy message of the Fourth Plenum. Xinhua stated that it was “particularly clear” the 15th Five-Year Plan will remain “consistent with the 14th Five-Year Plan” in promoting Xi’s vision of “high-quality development.” That means emphasizing the quality rather than the speed of growth, strengthening domestic industries and markets, and increasing China’s control of global supply chains.

The most notable change from five years ago was the elevation of industry above innovation as the first substantive section of the Proposals. “The framework, structure, and design of the document are deeply significant,” Xinhua noted. While industry and innovation are intertwined in China’s strategy, this reordering signals a renewed emphasis on remaining the world’s factory in established sectors as well as “seizing the commanding heights” of emerging and future industries. It is Xi’s sequel to China’s old growth model built on debt, property, and cheap labor. The table below lists the sectors that Beijing intends to prioritize for credit, investment, and talent.

The implication is clear: China will remain a high-capacity economy that puts industry first and households second. Tensions with other industrial economies — especially in Europe and North America — will intensify as Chinese producers seek dominance in new industries, much as they did in electric vehicles, lithium batteries, and solar panels.

Despite Beijing’s own concerns about overproduction and ruinous price wars, the plenum offered few credible answers for how to curb such “involution.” Pledges to reduce provincial protectionism and promote corporate self-discipline are unlikely to overcome the incentives that drive regional governments to back local champions and firms to chase market share. For Xi, the United States stands as a cautionary tale of deindustrialization, a reason he insists that China’s economy “must not shift from the real to the virtual.” That logic may help explain the gap between policy recognition and policy action.

Of course, techno-nationalism is not the whole story of the next five-year plan. Beyond the headlines, Beijing continues to roll out very prosaic, very necessary, and very decent policies to solve problems any government faces. Xinhua highlighted a scheme to extend occupational-injury insurance to China’s 84 million gig workers, quadrupling the scope of pilot programs launched in recent years. Other priorities include higher pensions, better schools, more public housing, and gradual increases in the retirement age.

As CCA predicted, the Proposals signal modest but steady progress on structural reform. Beijing will pursue “a clear rise in the household consumption rate” by “letting new demand lead new supply and letting new supply create new demand,” a refinement rather than a departure from its supply-side approach, which has done little to boost consumer spending. Plans to “invest in people as well as things” — such as education, training, and social welfare — should help encourage spending, though direct consumer stimulus remain unlikely.

Perhaps mindful of China’s widening GDP gap with the United States and mounting domestic challenges, Xi has refocused somewhat on growth. Comparing his opening speech at this year’s plenum with his remarks five years ago, mentions of “economic growth” (jingji zengzhang 经济增长) rose from one to four, while references to “national security” (guojia anquan 国家安全) fell from seven to three. He also reaffirmed that the Party must “adhere to economic development as the central task,” a phrase he had not used to describe current priorities since the 20th Party Congress in October 2022. Xi said Beijing’s earlier goal of reaching per capita GDP of US$20,000 by 2035 “requires maintaining an appropriate speed” of development. That implies annual growth of over 4% for the next decade, though specific targets for 2026–2030 will not be released until the Five-Year Plan is formally published next March.

Beijing viewed the Fourth Plenum and the Trump-Xi summit as deeply interconnected. The Party declared that “major-power relations shape the international situation, and the evolution of the international situation profoundly influences domestic development.” Xi’s economic bet is that industrial innovation — not U.S.-style market consumerism — can deliver the productivity boost China needs to drive growth amid debt, demographic, and diplomatic headwinds. In that sense, the summit was less a venue for compromise than a bid to secure strategic breathing room for his agenda.

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The Fourth Plenum ended, fittingly, with the Central Committee rising to its feet for a stirring rendition of “The Internationale.” One line from the socialist anthem captures the spirit of the moment: “To create happiness for humankind, we must depend entirely on ourselves!” China’s next five-year plan will deepen its pursuit of indigenous innovation and manufacturing might, driven by Xi’s conviction that self-reliance is both an economic strategy and a national security necessity.

Self-reliance appears to be paying foreign-policy dividends. Xi is finally achieving the “new type of great-power relations” he sought with the United States when he took office in 2012. Donald Trump now deals with China as a fellow superpower and treats Xi as a peer on the world stage — something Beijing has long desired. For Xi, recognition of parity is the ultimate vindication of his model.

At home, Xi is projecting strength despite formidable economic headwinds. Property prices are falling, consumption remains sluggish, and youth unemployment is high. Yet he can still point to a growing economy and tangible gains in artificial intelligence, environmental protection, and renewable energy. His ability to manage strategic competition with Washington reinforces his dominance inside the Party and bolsters the narrative that Beijing delivers stability where Washington delivers chaos.

This political confidence gives Beijing an edge in U.S.-China dealmaking. Xi can absorb more short-term economic pain and offer tactical flexibility when needed because he faces less domestic pushback and plans on a longer time horizon. Yet the Fourth Plenum’s call for “extraordinary measures” to accelerate innovation also betrays urgency: China must make rapid gains to lift productivity and reduce reliance on foreign technology lest the geopolitical tide turns again. Over the next five years, Xi’s goal is clear — close the technological gap with the United States so China can no longer be coerced or contained. Mao would have admired the ambition.

Whether China can achieve it is another matter. At the plenum, Xi urged the Party to play “one national chessboard” (quanguo yi pan qi 全国一盘棋) — a metaphor for unified, top-down coordination — and to learn to “play the piano,” (tan gangqin 弹钢琴) Mao’s injunction to harmonize competing policies and interests. The balance between those metaphors will shape China’s future. For now, the first outweighs the second: Beijing is likely to be effective at strengthening its industrial base and geopolitical security, but less efficient at generating the productivity gains needed to meet long-term growth targets. Xi may never strike a grand bargain with Trump, but he is setting the board so China can play by its own rules. After all, Xi is better at board games than music.