China’s Regional Development Trends in the 15th Five-Year Plan Period

As China prepares its 15th Five-Year Plan (2026 – 2030) that focuses on its domestic cycle of production, distribution, and consumption, interregional competition is becoming increasingly unavoidable. Understanding the economic shifts and trends across cities and regions is now critical for the country’s national strategic planning and development.

Based on current trajectories, Jiangsu, Zhejiang, and Shenzhen are emerging as the top tier of China’s future economy. These southeastern coastal regions have long been pioneers of reform and opening up, with strong, dynamic private sectors and well-organized, high-quality governance.

Even amid national economic headwinds, they have demonstrated remarkable resilience, diversifying markets globally, upgrading product structures, and driving innovation. Notably, Shenzhen stands out as the only first-tier city to see a year-on-year increase of 5.8% in 2024.

This region also leads in tech innovation. Companies like Unitree Robotics, DJI, BYD, Tencent, DeepSeek AI, ZTE, Alibaba, and Ant Group form a thriving tech ecosystem that continues to attract national policy support and young talent. Under current policy priorities, these firms will play a pivotal role in powering regional growth throughout the 15th Five-Year Plan.

Guangzhou, however, tells a more complicated story. Despite its first-tier status, its close economic link with Hong Kong has often been overlooked, leading to overly optimistic projections. In reality, Guangzhou’s GDP growth in 2024 was only 2.1%, according to the city’s government work report. Without a stronger performance in consumer spending, its medium-term outlook remains uncertain.

The second tier of China’s economy in the future is its western region, with Chengdu and Chongqing as major cities. These cities have balanced economies with strong manufacturing and service sectors, and they are among the few regions still experiencing population growth. This demographic trend supports future consumption and economic vitality. However, it remains unclear whether local authorities fully recognize and are prepared to capitalize on their human capital advantages.

Still, challenges persist. Workforce quality lags behind the southeast, the manufacturing base is more vulnerable to geopolitical pressures, and the tech sector trails first-tier cities. Urban renewal also presents a major hurdle, with outdated spatial planning requiring heavy investment. These factors contribute to a significant development gap and a less certain outlook for the region during the 15th Five-Year Plan.

Shanghai holds a crucial role in China’s national economy, but its current trajectory is far from looking good. While it has attracted some high-profile investments, these wins are modest relative to its economic scale. Capital outflows continue, and its prolonged reliance on real estate has inflated living costs, dampening population inflows, consumption, and job creation. The local administration, while highly educated, is often seen as lacking in execution. Private-sector enthusiasm has cooled, epitomized by notable entrepreneurial setbacks like Jack Ma’s, and economic growth has been volatile. Shanghai, as a leading megacity, has strong potential for urban renewal to drive growth. However, its efforts often focus on traditional real estate development rather than innovative, sustainable projects. To thrive amid fierce competition, Shanghai must leverage its strengths to attract enterprises and foster innovation, ensuring long-term economic vitality.

Beijing faces its own difficulties. Years of heavy infrastructure investment have led to high operational costs, and major strategic projects like the Xiong’an New Area and the Beijing-Tianjin-Hebei integration have kept the city in a prolonged state of adjustment. This has limited Beijing’s ability to focus on broader economic planning and weakened its influence on northern China’s growth. During the 15th Five-Year Plan, a key test will be whether Beijing’s suburban development can become more independent and efficiently managed. If successful, the capital can still act as a vital engine for the broader northern region. When the economy is booming, Beijing’s economy is often perceived to have little impact on surrounding areas, but during a downturn, it is clear that nothing works without Beijing.

The analysis points to three key priorities for China’s 15th Five-Year Plan: population, consumption, and technology. These areas are crucial for driving growth within the domestic circulation strategy. How well China manages these challenges will shape its progress toward achieving basic modernization by 2035. Success depends on openly addressing structural weaknesses, tackling economic bottlenecks, and directing policy resources where they matter most.

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