China aims to systematically strengthen the foundations of its industry—from core components and raw materials to basic software. The five-year plan, published on October 22, 2026, targets segments in which European suppliers have traditionally been strong. This will intensify competition in China and make the protection of know-how even more critical.
By 2030, vulnerabilities are expected to be significantly reduced, and core capabilities are expected to reach world-class standards overall. The concept of the industrial base also encompasses skilled workers, market conditions, and the political regulatory framework. At the same time, a new generation of individual champions and specialized small and medium-sized enterprises is expected to emerge, achieving world-class standards in niche markets. The model of German “hidden champions” is unmistakable.
Where Beijing promotes domestic suppliers, market opportunities are shifting. Chinese buyers, particularly state-affiliated companies, will favor domestic alternatives as soon as they meet technical requirements. The sectors most affected include mechanical engineering, component manufacturing, measurement and control technology, materials, and industrial software.
At the same time, pressure is mounting on the expertise of those who currently master these technologies—through localization expectations, joint ventures, documentation requirements, the poaching of key personnel, or inadequately protected knockoffs. Companies should verify whether their portfolio of patents, utility models, and designs in China covers critical components, whether manufacturing and process know-how is effectively kept confidential, and whether contracts with Chinese partners clearly regulate licensing, further development, and the transfer of rights. If technical data flows to China, data protection and export control laws must also be observed.
The plan consistently pursues the strategy of technological self-reliance—what is new is the depth with which Beijing is addressing the fundamentals of industry. Technological leadership alone no longer guarantees market access in China. Those who wish to remain successful must actively defend their position: legally, contractually, and organizationally.
