Ongoing diagnosis key to China's growth trajectory

Premier Li Qiang stressed the importance of efforts to consolidate and expand the momentum of China's economic recovery and positive development trajectory and accomplish the country's annual economic and social development goals while chairing the ninth plenary meeting of the State Council, China's Cabinet, in August.

Amid a complex and challenging environment, the meeting provided governments, enterprises, and other entities with clear guidance, and signaled a firm determination to press ahead. Looking ahead, the fourth plenary session of the 20th Communist Party of China Central Committee, set to be held in October, will unveil a sweeping vision for the next five years and lay out the blueprint for the 15th Five-Year Plan (2026-30).

This is a crucial juncture. All available resources must be mobilized to overcome obstacles, ensure annual economic growth, complete project construction, safeguard people's livelihoods, and lay a solid foundation for the transition into the next planning cycle.

Sustained economic development depends on reactivating growth engines and finding new momentum amid change. The government is expected to introduce strong, targeted measures to spur consumption — for example, issuing consumption vouchers, organizing promotional campaigns, and supporting industries such as retail, catering, and tourism. Tourism could benefit from special routes and discount packages jointly launched with enterprises.

At the same time, greater support for enterprises will be crucial. Firms should be encouraged to boost research and development investment and drive industrial upgrading. For manufacturing firms, tax incentives and financial subsidies can help them introduce advanced equipment and technologies, improve efficiency, raise product quality, and increase competitiveness. On the investment side, approvals and construction of major projects should be accelerated, while the private sector should be encouraged to participate in fields such as infrastructure and emerging sectors, which will inject strong impetus into economic development.

For instance, projects such as the construction of 5G base stations and charging facilities for electric vehicles will underpin the digital economy and green mobility.

Yet challenges remain. Uncertainty in the international environment and restructuring of global supply chains weigh heavily on China's economy. Domestically, lackluster demand and difficulties for some enterprises require urgent solutions. Thus, it will require a precise understanding of market needs, optimized industrial structures, and improved quality and efficiency of the economic development. The government must strengthen macro regulation to keep growth within a reasonable range, while enterprises must innovate and sharpen core competitiveness to remain resilient.

Project construction is a key pillar of economic development, akin to high-speed trains pulling regional economies forward. Projects under construction must be comprehensively reviewed with clear timetables and roadmaps. Delayed projects must be identified and resolved — whether through land coordination, financing solutions, faster approvals, or revised construction plans. For example, when land issues delay a major industrial project, local authorities should expedite land requisition and transfer procedures to keep it on track.

At the same time, a pipeline of new projects must be planned to secure future momentum. Priority should go to initiatives aligned with national policy and regional strategies, particularly in strategic sectors such as renewable energy, big data, and artificial intelligence. These not only stimulate related industries, but also strengthen regional innovation and competitiveness.

However, difficulties persist: financing difficulties, talent shortages, and rising environmental standards. These call for closer cooperation between government and enterprises, innovative funding models, stronger talent training and recruitment, and rigorous adherence to environmental requirements, ensuring projects both drive growth and protect ecosystems.

Improving people's livelihoods is both the starting point and ultimate goal of development. It is also key to social stability. Progress must focus on issues of greatest concern to the public.

In education, investment should be increased to improve facilities and teaching quality. Teacher training and compensation must be strengthened to attract talent. Promoting fairness is essential to narrow urban — rural gaps — for instance, by standardizing compulsory education.

In healthcare, the system must be improved to expand grassroots capacity. Reform of the medical insurance system should reduce people's costs, while public health capabilities need strengthening to respond to emergencies.

In employment, active labor policies, vocational training, and entrepreneurship support will help ease pressures.

Today, challenges still persist: unequal education resources, shortages in healthcare, and mounting employment pressures. These require greater government investment, better systems, and higher levels of welfare protection so people can share in development gains.

By making a strong sprint toward annual targets, China can accumulate experience, strengthen governance capacities of both government and enterprises, boost market confidence, and create a favorable environment for the next stage.

Looking forward, embracing the 15th Five-Year Plan (2026-30) reflects proactive alignment and forward-looking planning. Work in the remainder of this year must not only meet current targets but also clarify the direction and priorities for the next five years, integrating short-term objectives with long-term strategy.

First, innovation must lead. Scientific and technological innovation is the core driver of economic and social progress. The 15th Five-Year Plan (2026-30) should prioritize innovation through greater investment, diversified funding, and incentives for enterprises, universities, and research institutes. More emphasis should be placed on basic and applied research and making breakthroughs in key areas such as artificial intelligence, quantum computing, and biotechnology.

Promoting closer collaboration between industries, universities and research institutes will promote the industrial application of scientific and technological advances, while nurturing innovative firms and clusters to enhance global competitiveness. Innovation parks and alliances can attract top talent and resources, creating strong ecosystems. Yet challenges remain — talent shortages, suboptimal environments, and low commercialization rates — requiring better policies and incentives.

Second, the green transformation must deepen. Sustainable development demands an economy-wide shift toward clean energy, green industries, and circular models. Clean energy such as solar, wind, and hydropower must account for a larger share of energy consumption.

Traditional industries should be modernized to reduce emissions and improve efficiency, while recycling and waste reduction should be promoted in heavy industries like steel and chemicals.

Cities must be built as "green" and "sponge" cities, with eco-friendly buildings and transport systems. However, high costs, weak incentives, and limited public awareness remain hurdles, requiring stronger policies, stricter standards, and broader participation.

Third, people's livelihoods must keep improving. Education modernization, healthcare reform, stronger social security, and elderly care are vital. Education should be better aligned with industry needs; healthcare reforms should improve grassroots services; and social security should expand in coverage and benefits. Elderly care must adapt to population aging, with multi-tiered models combining home, community, and institutional care. Challenges such as diverse needs, financial pressures, and regional disparities require careful coordination and targeted measures.

Sprinting toward annual targets provides practical foundations and experience for long-term planning, while long-term planning offers strategic guidance for near-term goals. Only by combining the two can China seize opportunities, meet challenges, and achieve high-quality development in a complex and changing environment, laying the groundwork for a better future.

The writer is a researcher at the Chinese Academy of Macroeconomic Research.

The views do not necessarily reflect those of China Daily.