China seeks to enhance rare earth advantages, take ‘extraordinary measures’ to achieve semiconductor breakthroughs — new five-year plan marks doubling down on technological self-reliance

China has just released the latest draft of its 5-year plan, which is set to be approved during the next full session of the National People’s Congress from March 5 to 12, 2026. This document lays out the plans and policies that the central government will implement in the next five years, from 2026 through 2030, with the draft showing how Beijing intends to react to the ongoing trade war and tech rivalry with Washington. According to Nikkei Asia, the government is concerned with the ongoing instability in international relations and that it’s taking steps to insulate itself from such. “The balance of international power is undergoing profound adjustments. Geopolitical conflicts are more frequent and widespread, the global governance deficit is widening, and security issues are becoming more prominent,” the document said.

Some of the key policies set in the draft 5-year plan included building a more robust “response mechanism” to enhance its supply chain security and enhancing its “competitive advantages in rare earths.” This is the biggest issue that China has encountered so far in its drive for technological superiority. The U.S. has been applying export controls to several critical technologies that the country needs, like Nvidia’s and AMD’s latest AI chips, as well as ASML’s photolithography machines, which chipmakers need to make the most advanced semiconductors. On the other hand, Beijing now requires export licenses for rare earth materials, making it harder for tech companies and semiconductor manufacturers to acquire these minerals that are crucial to making the highest-end chips.