Time for some recalibration

China is recalibrating its economic approach amid a global shift toward geo-economics, where security concerns increasingly drive policy over efficiency. The country remains committed to opening-up but is refining its strategy to navigate rising trade restrictions, with over 2,500 new restrictive measures imposed worldwide in the first 10 months of 2025, according to Global Trade Alert. Key supply chain disruptions, including risks in the Arctic, Panama Canal, and Strait of Hormuz, further underscore the need for diversification. The 15th Five-Year Plan (2026-30) highlights China’s development challenges, noting strategic opportunities alongside growing uncertainties. Despite this, China is deepening multilateral ties, signing cooperation agreements with over 150 countries and 30 international organizations under the Belt and Road Initiative, which now accounts for more than half of its total foreign trade. The plan also emphasizes institutional opening-up, with progress in the Hainan Free Trade Port and over 20 pilot free trade zones. China’s strategy focuses on three coordinated tracks: investment, trade, and rules. Investment priorities include advanced manufacturing, modern services, high-tech industries, and green development, with expanded market access in sectors like telecommunications, internet, education, culture, and healthcare. Outbound investments are shifting from resource acquisition to global value chains, fostering two-way flows of capital and technology. Trade policies are now oriented toward quality rather than scale, aligning with broader efforts to strengthen economic resilience. China continues to promote regional and bilateral trade agreements while adapting to global economic tensions. The approach reflects a balanced strategy, combining cautious engagement with external risks and sustained support for globalization.