In light of China’s expected push to full technology independence, GCC States would be well advised to conduct thorough reviews of the security implications of their technological partnerships with China, if only from the perspective of the ramifications this may have on their relationship with the United States.

2021-2025 Five Year Plan: A focus on stability, resilience, and technological advancement

China’s upcoming 14th Five Year Plan (FYP), will outline the basic direction of party-state economic policies for the period of 2021-2025, is expected to be unveiled shortly during the fifth plenum of the current Central Committee of the Communist Party of China (CPC). A longer development plan leading up to 2035 is expected to be presented.

Our experts estimate that backing of the continued development of China’s technological infrastructure will likely be prioritized in the upcoming FYP. The American campaign against multiple Chinese tech-giants such as Huawei, ZTE, Tencent and ByteDance, among others, hand in hand with greater scrutiny of technological and scientific links between the two states (and American allied third parties), is pushing Chinese elites towards acknowledging the need for technological de-coupling and independence to weather American interdicts against them. Open commentaries in Chinese media describe this de-coupling as a painful sacrifice that will likely hurt or slow Chinese development for a decade, but one that will ultimately reap-fruit and enable the country to emerge as a major technological superpower. Aspects of the ‘Made in China 2025’ plan, downplayed a few years ago due to growing criticisms from industrial powers, will probably surface within the context of the FYP as such. In addition, new digital initiatives – such as digital currency – will be given considerable attention.

Implications for GCC States

We expect emphasis on stability, immunity from external vulnerabilities (through greater emphasis on internal sources of growth), keeping provincial-level debt in-check, while also continuing technological upgrade. This bodes well for the states of the Gulf Cooperation Council (GCC) – particularly Oman, Qatar and Saudi Arabia – that are heavily reliant on the Chinese market (and which have benefited both from the imposition of sanctions on Iran in 2018 and the massive spike in demand from Chinese private refineries earlier this year). Looking ahead however, China will continue to seek to diversify its energy sources away from the Gulf (a process already underway for several years) and continue to support the electrification of its transportation system, alternative energy generation, and greater energy use efficiency (all of which dovetail with its technological goals).

While the Chinese state has shown a commitment to supporting its technological giants, GCC States may want to conduct thorough reviews of the security implications of their technological partnerships with China (e.g. Huawei 5G deployments, Sino-Saudi nuclear cooperation, Saudi cooperation on the use of Chinese GPS-equivalent satellite systems like Beidou), if only from the perspective of the ramifications this may have on their relationship with the United States. Sino-American relations, which are currently the worst they’ve ever been since the normalization of bilateral ties in 1978, will probably continue to deteriorate: this will force the GCC to contend with binary choices (mostly emanating from Washington) over whether to choose Chinese or American technologies.