The holiday is over and the strategy has begun.
Chinese provinces just revealed their game plans for the next half decade and they are going all in on tech manufacturing and risk control.
We'll discuss the roadmap for China's future.
We're live from our studios in Beijing.
This is Roundtable.
I'm Steve.
Hello there.
Thanks very much for being with us today.
And for the show, I'm with Yuxuan and Feifei.
Up first.
In China, the first meeting after Spring Festival isn't just symbolic, it's directional.
On the first working day of the Year of the Horse, many Chinese provinces convened high-profile first meetings laying out their priorities for the year and, more importantly, for the next five.
Some are doubling down on tech innovation.
Others are racing to strengthen manufacturing, attract private capital or tighten risk control.
So what signals are these provinces really sending?
And what do these strategic choices reveal about the next chapter of China's economic transformation?
Fei-Fei and Yuxin, good afternoon to you both.
Before we get into specific details, I guess we should start with what these first meetings are and why they're such a big deal.
As you mentioned that, this first meeting of the spring is the high level conference that usually each province holds on the very first working day after the spring festival holiday.
And it's not just a routine meeting, because it's a big agenda-setting moment.
And this year specifically, is even, I think, more important because we just finished that previous five-year plan and then a lot of these provinces are starting the new plan, which is, which means that we are starting a new five-year plan for the future.
Like everything agriculture, infrastructure and everything these gatherings carry strong strategic weight, signaling that the New Year's work has officially begun and also setting the tone of the months ahead.
It's just like both a symbolic kickoff and a practical roadmap for these areas, and provincial leaders use the occasion to lay out the year's key priorities, align officials around major goals and send a clear message about where development is headed.
And it's part ceremony, part strategy session and very much a statement of intent for the year to come.
Yeah.
So especially this.
I mean, this is something that they do on a yearly basis.
But this one's even bigger because it's the new five year plan as well.
All right.
So let's take a look at some specific provinces.
Then we'll bounce around the country a little bit, I guess, from province to province to find out what, what is going on with their plans.
Yeah, so first of all, for example, one of the very high-profile provinces in China is Guangdong, in the southern part of the country, which is known for its industrial base, its manufacturing, its services and a lot of things.
It's actually one of the, I will say, one of the richest provinces in the country.
What are the biggest cities in Guangdong?
I think the most famous one would be Shenzhen.
And Guangzhou.
And Guangzhou as well.
So, when it comes to numbers, for example, the GDP of the province of Guangdong is 21 trillion, which is even bigger than the whole country of Spain, based on 2025 figure from an international monetary fund.
So it's a very rich and big province economic-wise.
But when it comes to their plan for this particular year and also over the next five years, Guangdong has its own challenges.
For example, it has very high quality when it comes to manufacturing.
A lot of the things from as little as a lighter to as big as robots can be manufactured in that province.
And at the same time, they also have a very robust service industry.
So, when it comes to finance, when it comes to other things tourism the service sector actually makes up more than half of the province's economy.
So now the province is looking to make a coordinated development of both manufacturing and services so that it can stay and climb up on the global value chain.
So synergy is the key word for Guangdong's province then?
Yeah, exactly.
So, in its 2026 Government Work Report, which is the document that lays out the priorities, Guangdong made this direction, the synergy between manufacturing and services, very crystal clear.
They want to upgrade the service sector.
That will help drive and support the transformation of the entire industrial system.
So in other words, it means better logistics, better financial services, better design, better digital services and research and development aren't just add-ons.
They are the engines that can power manufacturing into a more higher and higher value territory.
Hmm.
And so that's why they are working to because, when it comes to manufacturing, for example, some of the traditional manufacturing can only create very limited added value.
And then part of the service sector.
Especially when it comes to financial, the financial sector it can become very disconnected.
From the real economy.
From the real economy.
And that can lead to problems, for example, what economists call the bumble disease.
That means when service sectors grows, but overall productivity growth slows.
And that means that only drives up prices, but not reflected on the whole of the economy.
And so this is a concept that was introduced by economists called William Baumol.
Yeah, that goes back a long time, I think, when he came up with that.
That's an interesting way to look at the economy, and it does apply to this type of conversation.
It's like 50 years ago, if you go for a haircut and it costs 5, but today you go for that same haircut and it costs 30.
Well, nothing really changed.
Everything got cheaper in terms of the manufacturing, but in terms of the charge for the haircut it got more expensive.
So in ideal cases, when your haircut becomes more expensive, your income should also be increasing.
But it doesn't.
Yeah, it doesn't really happen in that case all the time.
And that's the disease, is that jobs rely on human time. barbers or teachers or doctors or whatever musicians you can put them into that group as well um but yeah they those jobs they rely on them to get more expensive but you can't make a person work faster than they already do so there's no it doesn't there's no scale there right um all right so that's one example let's go to another province and see what they're up to Yeah, in Northeast Liaoning province taking a practical start small aim big approach to improve the business environment and officials focus first on small everyday problems that businesses and citizens notice and things like slow payments, poor service or excessive red tape.
Fixing these small entry points creates immediate, tangible improvements people can feel.
Then comes the second step fixing the system for the long term and successful practices.
New service models and management rules are written into policy and regulations, making the improvements permanent.
The goal isn't a short-lived campaign, but a fundamental, lasting transformation that reshapes the whole business ecosystem.
Because when we are having these conversations in a five-year plan, they need to come up with the actual plan and strategic plan for the government.
It's of course.
Some of the citizens can see some of the changes, let's say, in the city, urban area they're trying to refurbish, or something like that.
But the actual thing is about the whole map, the whole changing plan for the whole city is not only about The service that we mentioned, is also about maybe, infrastructure of the city, like public transportation and everything, so that it is becoming a thing that citizens or they can actually realize.
And also when it comes to Liaoning.
I think it's a very different case from, for example, Guangdong province.
Yeah, that's more of a tech hub.
And we're talking northeast here.
That's a heavy manufacturing hub.
Yeah, so Liaoning used to rely on heavy industries like steelmaking.
And right now we can see for these really heavy industries.
They're going through some kind of transformation globally.
And Liaoning is having difficulties keeping up with this transformation.
And also there is this I would say stereotype when it comes to doing businesses in Liaoning and also in the whole of northeastern region of China is that you need to rely on connections.
Human relationships.
Yes, you need to have some sort of connections in this region so that you can have a successful business.
And that really drives a lot of entrepreneurship away.
So that's why... Oh, because they don't have the established connections.
Yeah, and it feels like very overwhelming, very challenging to start a business in that particular place.
And that's why, in their first meeting of the year, Liaoning Province emphasized on improving their business environment.
They're trying to make things easier, more transparent, so that entrepreneurs don't feel intimidated when it comes to doing businesses in Liaoning.
And also when it comes to their traditional industries.
They're not saying we're abandoning heavy industries because steelmaking isn't making a lot of money as before.
Yeah, that's another area where smart technology is helping out a lot, too.
Yes.
For example, in Dandong City, also in the province of Liaoning, they have a factory that's becoming one of the national sort of a new benchmark industrial digitalization smart factory.
So this factory uses AI, uses 5G, big data and other digital twin technology across their whole production chain to make operations safer, greener and more efficient.
As a result, the factory has cut energy use by 44% and reduced carbon emissions by 23%.
And also they are able to recycle nearly all the waste and water they use.
So this is one of the examples that they still have, like iron factories, like steel makers, steel manufacturing industries in the province.
They're just trying to make it smarter, to make it greener, so that it can keep up with the transformations that we need.
A lot of the money invested in research and development in Guangdong province would be used for tech and advancements.
What can we make next?
What can we build next in terms of being cool and successful?
But in the northeastern part of the country heavy industry a lot of the research and development money would be going into.
OK, you can still do what you're doing.
You got to do it a lot cleaner, though, than you were doing it before.
Yeah, because we're still going to need this still anyway in Guangdong province, for example.
And I think that is interesting when we can just see some of these characteristics of these different provinces and areas.
And one thing that I realized that, no matter it's about these five-year plan or local people or cuisine, the one thing is that you can see the characteristic through their food or service and you can just totally see, even though because we can, we are living in Beijing, but we can have different food, cuisine from different areas right, and I just realized that whenever I go to a Guangdong cuisine restaurant, they always offer very good service.
Of course, sometimes they charge more, but they dress really good.
And then they offer you like tea before the meal.
And then, yeah, that's kind of their Guangdong style.
And when you step into a Northeastern cuisine restaurant, they offer you that kind of passionate big plate of food right.
Of course, I'm not saying about the food, but it's...
I think reflecting in some of these plans also in their regions, because they are making plans according to their own situation.
And that is what when these regional, these provinces working on and it's not a one-size-fits-all plan to all of the sure.
Yeah, I mean, we've talked a lot on the show about how China's getting smaller in the sense where, you know, companies in the south can do business with companies in the north and Logistics are getting a lot more efficient and faster.
But I just had a thought.
It must be a little tricky sometimes if a company from the northeastern part is trying to do business with a company in the southern part, for example, because perhaps of the different business cultures that exist there.
Exactly.
When it comes to, for example, the example Yusheng gave out.
I remember that the services a lot of these southern provinces, for example, in Guangdong, in Zhejiang as well.
They're also very known for their entrepreneurship.
They can be very fast in responding to your demands.
And they can be very flexible as long as we can cooperate and have some sort of things get done.
We can be very flexible.
We can be very fast responding to your demands.
But when it comes to where I'm from northeastern part of China this kind of flexibility and answering to your demands can be a bit slow.
So it's also part of the cultural thing as well.
It's not saying that people from Liaoning don't like to do businesses with people from other parts of the country.
It's just the way it's done is a little bit different.
Yeah, you need to sometimes...
In a way, when you communicate with, for example, a business person from Guangdong province, you need to be very direct when it comes to your demands, to your costs, to your concerns.
But when you are communicating with a person from Liaoning, you can't be that direct when it comes to how much money I have and how much money you can give me.
You need to have some of the conversation beforehand to build that bonding.
And then you can go to the details.
Sometimes I feel like China is one place.
And then sometimes I feel like China is so many different places within one place.
Let's go to Hubei province next.
This is a really important part of the country because of its geographic location.
This is the second year in a row that Hebei's first meeting has focused on building itself into quote an important strategic pivot for the rise of central China.
It really is kind of a crossroads for a lot of different places.
Yeah.
Hubei is known for as the crossroads of nine provinces, because it sits at the heart of a lot of transport network.
So from its capital city, Wuhan, you can basically reach to 90% of the country's population.
So Hubei is, so when it comes to transport, is kind of the hub for air cargo, for shipping on river.
That would be the Yangtze River.
Yangtze River.
And also when it comes to rail freight center as well.
So you can see the reason why it's positioning itself, trying to be the hub of the central part of China.
So this would be an important region because what's that expression?
Rising tide lifts all boats.
I'm thinking that you know, if Hubei rises, then the regions all around you said a connector of nine different provinces.
If Hubei rises, then all of those other provinces would rise as well.
Yeah, they can take part in, for example, not only the transport but also some of the industries, the innovation that comes out of Hubei, from Wuhan, for instance, and that can benefit the whole of central China.
It's also part of the national plan as well that trying to position Hubei as the spearhead when we are talking about lifting all of central China above.
Because of the geography, it is at the center of China.
And no matter it's in the past, in ancient China or in modern era, we can see that the intersection of these areas, they can always be a very, very prosperous hub, for no matter it's for transportation or for economics.
So they are linking the transport, also spreading industry and exporting innovation.
So the promise is turning its geographic advantage into a driving force for the rise of the whole area.
Why is or why are the priorities?
And I'm learning a lot here today.
I hope our audience is as well.
We learned a little bit about the cultural differences from province to province when doing business, but why are the priorities so different from region to region?
Well, first of all is that, as we talked about before, is that each province has its own strength and shortcomings, and they need to work on that.
And another thing is that, when it comes to look at China as a whole, Each province has a sort of a different position when it comes to what your position is in the country,
For example, the Hubei we just talked about is the pivot, the hub for central China.
But Guangdong would be a different story.
And Liaoning would be, of course, another story.
So it's like, is this a fair assessment or comparison?
It's like characters in a drama.
And everybody kind of has their role.
Yeah, in a way.
But there are still some similarities, I think, that we can see from these provinces.
For example, Shandong is kind of similar to Liaoning because Shandong also used to be an industrial hub.
And they are also trying to leverage smart technologies like artificial intelligence to transform and upgrade their manufacturing.
We are actually seeing a lot of innovation taking place in, for example, steel manufacturers in Shandong.
It's one of actually pioneers in China when we're talking about creating low carbon steel and low carbon heavy industries.
And another thing, for example business.
Creating a more friendly business environment would be another similarities that these regions share as well.
We talked about Liaoning is trying to do that.
And we also have other provinces like Zhejiang, where Hangzhou is based.
A lot of tech companies like Alibaba, like Unitree is also based in that province as well.
And also when it comes to provinces like Fujian, which is also known for its private sector.
They actually invited a lot of managers and entrepreneurs from the private sector to sit in their first meeting of the spring in Fujian, because over 70 of their economic growth come from these companies.
And so they are trying to make things easier to have more preferential policies, for example, in taxes, in loans for these, for people who are trying to create their own businesses.
So I would say, even though we are seeing different priorities in different regions, that's because of, for example geography, because of different position, because of different economic structure that they have, they also have some similarities as well.
Yeah.
And speaking of similarities, of course, these provinces and regions, they are playing their own role.
And based on, I think, of course, the geography and also the effort they have been putting on.
Because, for example, Chongqing have just reclaimed its title as top car city.
And they are focusing on the quality and efficiency to ensure its industrial transformation actually pays off.
And I think we just mentioned that two models of that L self-driving models that is actually running in Chongqing City, because they have the specific environment for testing these self-driving.
Part of the geography of the city, right?
I remember you and I chatting about this on the show.
Quite, hilly Chongqing is so it creates a different environment for the cars to practice, creates a lot of obstacles for these self-driving systems, of course, and that's also what they natural obstacles, yeah.
And then regions see themselves as the new engines of growth and i actually seen some of these regions.
They are developing into a like way, more innovative way of of development, because anhui province is also one of my hometowns, because my mom is born and raised in that area, And I totally can see that in recent years they are developing so much more technological enhancement because they are turning technological innovation into actual economic gain.
And, for example, in quantum area.
The city of Hefei now ranks second worldwide in quantum development, just behind San Francisco.
And that's based on a 2024 report.
And Interestingly, it's also the sub-venue of the Spring Festival Gala and I think that stage is also reflecting some of the technological background in this.
Yeah, when you watch the gala, if you really pay attention to all the performances happening from different parts of the country, you can see that those performances reflect who they are as a people and what's happening within that region as well.
So, with all the regional development or all the regional plans for development over the next year and the next five years, how is this going to contribute to the national development?
Well, I think, first of all, we can see some of the signals because, very fastly, within this week, we are having our national level of these meetings, what we call the two sessions, where lawmakers and policy advisors will gather here in Beijing and to discuss, in particular on national level, what China is planning to do this year and also for the next five years.
And we can see, for example, innovation reinforcing the real economy as the foundation of the economy will be part of the conversation based on these first meeting, these priorities laid out by provinces and cities.
And there also will be more talks about accelerating industrial upgrading through innovation, and they are trying to build more modern industrial systems.
These will be part of the national plan and strategies as well.
Yeah, so alignment is very important.
Aligning the regional goals with the national strategy so that it can ensure that regional development is not fragmented but coordinated within the broader national strategy, especially At the beginning of the new five year period.
So I'm still stuck on this drama analogy.
So the country is the director and the provinces are the actors.
Yeah.
And the country gives the actors their lines and their roles and they perform them to the best of their ability for the overall improvement of the drama itself.
Yeah.
As the actors, they, of course, can pitch their ideas of the role they want to play.
I don't like my lines.
I want different lines.
And how they plan to play their role.
But it's up to the director, the country, to decide.
Well, it's all about high quality development, no matter we're talking about the northeastern part of the country or down in the far south.
The goal is clear.
Over the next year and the next five years.
Development and improvement as the whole country grows together is on everybody's wish list.
