Analyzing China’s 2021–2025 Informatization Plan: A DigiChina Forum


January 24, 2022

Article Banner Picture


January 24, 2022

China's Central Commission for Cybersecurity and Informatization on Dec. 28, 2021, issued the 14th Five-Year Plan for National Informatization, a lengthy document addressing a very wide range of policy and development goals for 2021–2025, the period of the 14th Five-Year Plan. DigiChina is hosting this Forum to gather analysis on what it says, what it might not, and what it all might mean. 

As we publish DigiChina's 21,000-word translation, the Forum kicks off with an introduction by lead translator Rogier Creemers.

Rogier Creemers, Assistant Professor of Modern Chinese Studies, University of Leiden; and Senior Editor, DigiChina

In the last week of each calendar year, Chinese authorities have a habit of publishing rather high-profile regulations and policies. For the China technology watcher, this year in particular did not disappoint. Between Christmas Eve and New Year’s Eve, Beijing approved several important regulatory measures on cybersecurity and algorithms, and issued high-level policy plans for the digital economy, platform companies, and the fintech sectors. The most important document, however, was the 14th Five-Year Plan for National Informatization (the "Plan"). 

The Chinese five-year planning cycle works like a set of Russian dolls. The overarching plan comes out first. On this basis, the high-level coordinating bodies interfacing between the Party Center and the bureaucracy draft general plans for their areas of responsibility. This Plan was issued by the Central Commission for Cybersecurity and Informatization, a dedicated body established in 2012 and the bureaucratic parent of the Cyberspace Administration of China. It contains general objectives and instructions, but preciously little detail on the legal and regulatory measures that will be taken to accomplish these, or the budget and resources appropriated to them. These details are the purview of subordinate ministries and local governments, who will come up with their own development agendas in the coming months. Nevertheless, the importance of the Plan should not be underestimated. It provides the strategic blueprint, the worldview and reasoning that will guide Party decision-making in the next five years. To be sure, changes will be made in the light of emerging circumstances and events, but they will likely not deviate significantly from the direction set out now. 

The Plan contains four major sections. First, it assesses the progress made during the previous five years, and China’s changing circumstances. Much is made of expanding connectivity: 98% of rural villages are now wired up, and so are all primary and secondary schools. There is similar pride in digital patent applications and growth rates in the digital industries, which now generate around 8% of GDP. Of parallel importance was the use of digital technology to enhance government informatization, and a national e-governance platform was established. The document touts international cooperation initiatives in the G20, the Digital Silk Road and the Global Initiative on Data Security, as well as progress in legislative developments. However, as the Plan reiterates, Beijing believes that the world is in a period of deep change that brings opportunities as well as challenges. Meeting these challenges requires “high-quality development” (高质量发展), a new buzzword associated with the broader 14th Five-Year Plan. In the informatization Plan's telling, China's shortcomings and imbalances are significant: The countryside still lags behind, digital productivity remains sub-par, there are weaknesses in critical technologies and international competitiveness, and the digital economy is too divorced from the real economy. In this view, much work remains to bring digital governance and social services to the grassroots, or to better integrate and use government-held data, and China’s voice at the international stage equally remains week.

This assessment sets the stage for the second section: the priorities for this plan. These include upgrading the digital economy, with particular focus on industrial, urban, and agricultural digitization, and upgrading the state’s ability to use digital technologies to function more efficiently and effectively. This requires completing the digital infrastructure and technology innovation system, thoroughly integrating the digital economy with the real economy, building a digital society, increasing the digital capabilities of government and using digital tools to enhance welfare. A critical term that frequently occurs in this light is “ecosystem” or "ecology" (生态): the Plan intends to stimulate the development of broad, mutually reinforcing, organically evolving systems that generate the progress this Plan targets. These include enterprises, universities, research institutions, government departments, sectoral associations, etc. A second core element is the focus on data, which is now designated as a major factor of production, next to land, capital, and labor. It bears remembering that, after all, the Chinese Communist Party remains Marxist. 

The third section outlines ten priority policy areas where advances need to be made: digital infrastructure, efficient data resource systems, liberating digital productive forces, building the digital industry, transforming traditional industries, building digital governance systems, digitizing governmental services, digital welfare and social security systems, mutually beneficial international cooperation, and regulating the digital space. The objectives here are sweeping, ranging from enhanced digital surveillance and crisis response systems to facilitating the convenient online handing of bureaucratic procedures and long-distance education and healthcare. 

The fourth section lists specific actions to be undertaken: enhancing the digital skills of ordinary people, growing enterprises’ digital capabilities, making breakthroughs in cutting-edge technologies, international cooperation in digital trade, enabling smart governance at the grass-roots, making digital development greener, advancing rural digital development, developing inclusive financial services, supporting digital public health, and rolling out smart care for the elderly. A point of note for hardened Pekingologist is that the document unequivocally assigns primary implementing responsibility to the Cyberspace Administration of China, with the support of the National Development and Reform Commission. 

While it remains to be seen how successful the actual implementation of the Plan is, it does weave together the individual threads of political concern that became visible over the past year and a half. Beijing intends to move away from many of the elements that had characterized both the global and the Chinese Internet. Signalling the Party’s move away from prioritizing GDP growth at any expense, and towards a more balanced development approach, the Plan is clear that the digital sector is not a free-for-all where corporate titans can enrich themselves, but intimately wedded to the growing spectrum of objectives that accompany the much-advertised “common prosperity.” Concomitantly, the digital sector should add true value in economic and social terms, not merely through financialization. As such, this Plan signals something very interesting and a world first: industrial policy for the digital age.

Paul Triolo, Senior Adviser, Paulson Institute

The sweeping nature of the 14th Five-Year Plan for National Informatization document is readily apparent, and echoes past such documents in its attempt to cover every aspect of technology development encapsulated in the innocent enough sounding word “informatization.” Let us please keep in mind what this word means: the introduction of digital technologies and the leveraging of data and information to make more efficient all aspects of the economy and government. It describes a process takes place organically to some degree, as various sectors in China seek efficiency. 

But there is an assumption in this type of document that, for reasons usually unstated though laid out in broad terms here, there is always a more optimal level of “informatization” and optimization that has not been achieved—and that if everyone follows the exhortations of the plan, new efficiencies will be reached, data will be more productive, government services will run better, and there will be harmony and balance between the government and “market actors” who make up particular “ecosystems” of the informatization space. 

In the context of this latest massive five-year vision for China’s digital development, the most jarringly obvious disconnect is between the government’s role and the role of China’s private sector tech companies, which are active in all aspects of “informatization” in China but over the past year have been the target of a major government rectification campaign. 

As usual for such documents, the Plan’s phrasing generally omits grammatical subjects, leaving it unsaid who is presumed to carry out grand structural processes such as “infusing,” “integrating,” or “optimizing” this or that economic sector or industrial domain with the wonders of digitization. For the authors, efficiencies are just out of sight, if only they can be harnessed—but by whom? The present regulatory campaign pits government against major industrial actors, so they are manifestly not entirely on the same page.

This passage in Section 10 (translation slightly revised from DigiChina's initial version) is particularly illustrative of this ambiguity:

  • Continue to grasp promotion, development, supervision, management, and standardization with both hands—and both hands must be strong; standardize in development; develop in standardization; establish comprehensive, multi-level, three-dimensional oversight systems; let supervision, management, and governance penetrate the entire process of innovation, production, operations, and investment. Clarify the relationship between government and markets (厘清政府和市场关系[1]); promote better integration of efficient markets and active government (推动有效市场和有为政府)[2]; stimulate the dynamism of all types of market actors, and promote the sustained, healthy, and orderly development of a digital China.

In the first part of this passage, the actors would seem to be the many government ministries overseeing the entire process, from the traditional state planning–minded National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT), to the newer content and Internet security watchdog the Cyberspace Administration of China (CAC). The two wings of the digital economy, going back to the speeches of Xi over the past 8 years, are informatization and cybersecurity, now embodied in the CAC, with help from all the older line ministries, and the obliging Public and State security ministries—which in toto now account for the Chinese cyber interagency. 

But the goals of the above paragraph critically involve non-government actors in the private sector, which is largely still governed by market forces. “Clarify the relationship between government and markets” here is really a plea and a threat: the government will clarify this relationship, in increasing detail, and markets and market forces will need to adjust to this reality.

This and other language in the document link back to the broader themes of the overall 14th Five Year Plan such as Common Prosperity and the quest for “sustained, healthy and orderly development.” The Plan seeks to direct the private sector—not through market forces but via a more active government (有为政府)—more strongly toward “core” or “hard” technology development and support.  

The document is a fascinating read and look into the minds of the industrial ministry and CAC officials, who now more than ever believe than they have a mandate from both the top, via senior political leaders including Xi Jinping himself, and from the bottom, in sync with public opinion on reining in big tech, to steer the technology sector toward a preferred version of informatization, rather than allow a messy, unsupervised market to bring the ill effects of financialization, worker exploitation, and the inefficiencies of “disorderly capital.” 

That’s an empowering position for key bureaucracies, but will the private sector get on board? Who will take on the Herculean job of “stimulating the dynamism of all types of market actors,” and how will incentive structures shape up? Will young entrepreneurs be willing to continue to devote their lives to innovate and build dynamism at the scale China has seen in recent years while the relationship between the government and the market becomes “clarified”? We may not know this in full until the end of the Five-Year Plan period, but there will certainly be hints along the path.

[1] This is a very interesting formulation. Here, 厘 () means a very small number, 清 (qīng) means 清楚 (qīngchu) or clear or to bring clarity to, hence the two together mean that everything should be orderly and clear down to the smallest aspects. Another translation could be “sorting out (the details).”

[2] This is a really important formulation about the relationship between government and market that has been around for some time and is the subject of much academic debate in China. The issues is usually formulated as, the market is efficient in allocating things like resources, but the government must play an “active" (有为) role. Some Chinese commentators focus on the need for the active role to increasingly mean the government progressively steps back when necessary, and ultimately gets to the opposite of inaction (无为, wúwéi) which is then equated with moving toward more complete marketization of the economy. In defining where the government should be active, some Chinese scholars hold that it should include things like overcoming the obstruction of interest groups inside and outside the system and promoting market-oriented reforms in a strategic and orderly manner, for example, in keeping with China’s state of development, etc.

Qiheng Chen has also joined this forum, writing on the Plan's view of data as a factor of economic production. His contribution appears as a separate article.

Check back again later for further entries.