Investment Rating - The report does not provide a specific investment rating for the industry Core Insights - The 15th five-year plan (FYP) is expected to prioritize resilience, security, and inclusivity over specific growth targets, with a potential growth target of around 4.5% for 2026, gradually shifting to around 4% by 2030 [4][60] - The report highlights the significance of the 15th FYP due to China's growing global importance and the challenges arising from the property market collapse since 2021 [3][4] - The anticipated "second China shock" refers to a surge in high-tech and high-value Chinese exports, which may disrupt global industries more severely than the first China shock [9][25] Summary by Sections 1. Overview of the 15th FYP - The 15th FYP will be discussed at the CPC's annual conference in October 2025, with the final draft to be approved in March 2026 [1] - The plan is expected to address the fallout from the property market collapse and focus on inclusive growth to maintain social stability [3][4] 2. Achievements and Setbacks of the 14th FYP - Average real GDP growth during the 14th FYP (2021-25) was around 5.4%, with significant advancements in technology and manufacturing [8][10] - The property market collapse has led to a significant decline in new home sales and has negatively impacted household wealth and fiscal revenues [44][45] 3. Key Themes for the 15th FYP - The report assigns a low likelihood to Beijing setting a specific growth target, instead emphasizing resilience and inclusivity [4][60] - Major themes include advancing tech self-sufficiency, addressing the property market crisis, and reforming the social welfare system to reduce inequality [4][60][69] 4. Geopolitical and Domestic Challenges - Geopolitical tensions are identified as a primary challenge, with the US-China relationship expected to remain tense [32][34] - The domestic property market remains a significant challenge, with ongoing efforts needed to clean up the sector and address the resulting economic impacts [50][51] 5. Demographic and Inequality Issues - China's aging population and rising inequality are highlighted as critical issues that could hinder economic growth [51][55] - The report suggests that reforms to the pension system are essential for promoting inclusive growth and reducing inequality [69][71]