Reading China’s 15th Five-Year Plan Through “Investing in People”

From public services to talent development, the draft outline shows how the idea is being translated into policy priorities.

China’s annual “two sessions,” the annual meetings of China’s top legislature and top political advisory body, began on Wednesday.

In addition to several key reports, such as the government work report, and several key pieces of legislation, this year’s agenda also centers on the widely anticipated draft outline of the 15th Five-Year Plan for national economic and social development.

Compared with the Communist Party of China (CPC) leadership’s recommendations for formulating the 15th Five-Year Plan, released last October, the draft outline provides far more detail.

Spanning more than 70,000 Chinese characters and organized into 18 sections and 62 chapters, the outline is too extensive to cover fully in a single article.

So in this piece, I focus on a concept that has been widely discussed in Chinese policy circles over the past year: “invest in people,” or “investment in human capital” (投资于人).

The Emergence of the “Invest in People” Concept

The idea did not appear overnight. As early as 2023, the Chinese leadership mentioned in a high-level meeting that China should not only continue “investing in physical assets,” but should closely combine this with “investing in human capital.”

A year ago, during the 2025 “two sessions,” the government work report used the phrase “investment in people” for the first time, saying that “more funds and resources will be used to serve the people and meet their needs.”

The recommendations for the 15th Five-Year Plan released last year emphasized:

坚持扩大内需这个战略基点，坚持惠民生和促消费、投资于物和投资于人紧密结合

Guided by the strategy of expanding domestic demand, we should work toward improving living standards while increasing consumer spending and combine investment in physical assets with investment in human capital.

The draft outline released on March 5 continues this formulation.

Why Emphasize “Investing in People”?

An article published in December 2025 in Qiushi, a flagship magazine of the CPC Central Committee, helps clarify the policy logic.

According to the article, as China’s development stage and conditions change, the returns on “investing in physical assets,” such as infrastructure, housing, and machinery, have declined significantly. Between 2008 and 2023, China’s incremental capital-output ratio rose from 2.84 to 9.44, meaning that generating each additional yuan of GDP now requires several times more capital investment than before.

At the same time, capital-driven investment can expand production capacity in ways that do not necessarily match evolving consumer demand, leading to localized overcapacity and structural imbalances.

Meanwhile, rising incomes and the expansion of China’s middle-income population are increasing demands for better public services and higher quality of life. Yet mismatches in the domestic supply-demand structure continue to constrain people’s pursuit of a better life.

What Does “Investing in People” Mean?

In an interview with Qiushi, economist Yu Chunhai, a professor at Renmin University of China, explained the concept:

“投资于人”，是指将更多财政资金和公共资源投向教育、就业、医疗、社会保障等民生领域，投入到人的能力提升、健康维护、职业发展和潜力开发中，以消费潜力释放和人力资本提升驱动经济高质量发展。

“Investing in people” refers to directing greater fiscal funding and public resources toward livelihood-related sectors such as education, employment, healthcare, and social security, and toward enhancing human capabilities, safeguarding health, advancing career development, and unlocking individual potential, so as to drive high-quality economic development through the release of consumption potential and the strengthening of human capital.

Yu emphasized that “investing in people” is not merely a type of investment or a particular investment direction. Rather, it represents a new development orientation — one that serves as a correction to past models of investment, capacity expansion, and even the broader development paradigm.

Furthermore, “investing in people” aims to raise individuals’ levels of knowledge, skills, health, and social adaptability, thereby improving the overall human capital and professional skills of society. The goal is to transform “human resources” into “human capital” capable of sustainable value creation, and to move from a “demographic dividend” to a “talent dividend.”

Where Will China “Invest in People”?

Following this logic, “investing in people” covers a wide range of areas. From the draft outline of the 15th Five-Year Plan, I’ve picked out a few examples that, in my view, highlight how this people-centered investment approach will shape China’s policy priorities over the next five years.

1. New Livelihood-Focused Targets & Major Livelihood Projects

Among the plan’s 12 key expected indicators, many relate directly to people’s well-being. Compared with the 14th Five-Year Plan, some targets have been adjusted. Here are examples:

• Life expectancy is expected to rise from 79.25 years to 80 years.

• The previous indicator of basic pension insurance participation rate has been replaced with the share of nursing-care beds in eldercare institutions, expected to increase from 68% to 73%.

• The metric of childcare slots per 1,000 people has been replaced with childcare enrollment for children under age three, expected to increase by 6 percentage points.

• The indicator of physicians per 1,000 people has been refined into two metrics: licensed physicians (3.7 per 1,000) and registered nurses (5.1 per 1,000).

To me, these adjustments suggest a more refined approach to people-centered services and a stronger emphasis on their tangible outcomes.

In addition, it is noteworthy that Chinese policymakers have emphasized that “the most important indicator of modernization is still the health of the people” and that “health is 1, and everything else is the zeros that follow,” characterizing the steady increase in average life expectancy as a reflection of the advantages of China’s socialist system.

加强人力资源开发和人的全面发展投资，在“一老一小”服务、基层医疗卫生、普通高中和优质高等教育扩容、职业技能培训等领域实施一批民生工程，提高民生类政府投资比重。

Strengthen investment in human resource development and in the comprehensive development of people. Implement a number of public welfare projects in areas such as services for the elderly and children, primary-level healthcare, the expansion of general high schools and high-quality higher education, and vocational skills training, while increasing the share of government investment devoted to livelihood-related areas.

Among the 109 major projects listed in the draft outline, 25 are related to improving people’s livelihoods, including 4 projects on building a high-quality education system, 7 projects related to healthcare, 5 projects focused on services for “the elderly and the children” populations.

This morning, the heads of five ministries related to people’s livelihood held a joint press conference, answering journalists’ questions on issues in the livelihood sector during the 15th Five-Year Plan period. The full transcript is available for those interested.

2. Paid Leave and New School Vacation Policies

落实职工带薪休假制度，鼓励弹性错峰休假，探索推行中小学生春秋假。

Implement the paid annual leave system for employees, encourage flexible and staggered vacation arrangements, and explore the introduction of spring and autumn breaks for primary and secondary school students.

The earlier policy recommendations already mentioned paid leave. The new outline adds concrete language about staggered vacations and school holiday experiments. The government work report, which includes plans for the coming year, also reiterated this point, suggesting implementation may accelerate.

According to People’s Daily, several provinces in China have already begun experimenting with spring and autumn breaks.

Lu Ming, a professor at Shanghai Jiao Tong University, has long advocated optimizing holiday arrangements across the year. According to him, short breaks in spring and autumn could stimulate consumption while also giving children and families much-needed breathing room.

He argues that China hopes to make consumption a new driver of economic growth — and much of the potential lies in sectors such as education, healthcare, culture, and tourism. But these forms of consumption depend on people having both the time and the well-being to enjoy them.

Lu, who is also a national political advisor, points out that many workers today feel they cannot take leave even when legally entitled to it, due to widespread overtime culture. Policies such as school breaks may therefore need to be paired with flexible leave arrangements for parents.

3. Talent Development in Strategic Technologies

围绕科技创新、产业发展和国家战略需求协同育人，提高人才自主培养质量。聚焦优势学科适度扩大“双一流”建设范围，新建若干所新型研究型大学。

Coordinate talent development with technological innovation, industrial development, and national strategic needs, and improve the quality of independently trained talent. Focus on key disciplines and appropriately expand the scope of the “Double First-Class Initiative,” while establishing several new research-oriented universities.

健全高等教育学科专业设置调整机制，超常规布局人工智能、集成电路等新兴领域急需学科专业，深入实施基础学科和交叉学科突破计划。

Improve the mechanism for adjusting disciplines and programs in higher education, make extraordinary arrangements for urgently needed disciplines in emerging fields such as artificial intelligence (AI) and integrated circuits, and advance in-depth implementation of breakthrough plans for basic and interdisciplinary disciplines.

China’s AI-related industries will be valued at more than 10 trillion yuan (1.45 trillion U.S. dollars) by the end of the 15th Five-Year Plan period, Zheng Shanjie, head of the National Development and Reform Commission, said at a press conference on Friday.

Such projections underscore the importance of investing in people in frontier technological fields. Planning talent development early in sectors such as AI can ensure that more people have opportunities to apply their skills and build careers in emerging industries.

As AI becomes a defining technology of the next technological revolution, strengthening the talent pipeline is critical. According to Li Jinghong, a national political advisor and a professor at Tsinghua University, AI is not only a key technology for the next technological revolution but also a crucial indicator of national innovation capacity. This, he said, requires systemic reforms that allow education, science, and industry to reinforce one another.

4. Building a Birth-Friendly Society

坚持生育友好的政策取向，推动生育支持融入经济社会发展各项政策。

Adhere to a birth-friendly policy orientation and enhance childbirth support through various economic and social policies.

While last year’s recommendations called for improving childbirth support policies (”优化生育支持政策”), the new outline goes further, emphasizing that birth support should be integrated into various economic and social policies.

Specific measures include:

• effectively eliminating out-of-pocket costs for hospital childbirth within policy coverage

• fully implementing maternity leave systems

• encouraging flexible work arrangements for parents with children under three

• allowing children from multi-child families to attend the same school

• direct housing policies in favor of families with two or more children

These policies signal a stronger commitment over the next five years to building a birth-friendly social environment.

5. Reforming Population Management and Urbanization

探索建立全国统一的人口管理制度，逐步实现由常住地登记户口。稳步提高农民工参加城镇职工社会保险比例，推动更多城市将符合条件的未落户常住人口纳入公租房保障范围。

Explore the establishment of a nationally unified population management system, and gradually realize household registration based on place of habitual residence. Steadily increase the proportion of migrant workers participating in the urban employee social insurance system, and encourage more cities to include eligible long-term residents without local household registration in the public rental housing support system.

因地制宜放宽在流入地参加中考报名条件，推进符合条件的随迁子女连续接受基础教育。

According to local conditions, relax the requirements for registering for the senior high school entrance examination in the place of residence, and promote the continuous access to compulsory education for eligible children who move with their parents.

An analysis published in February in the journal Governance （《国家治理》), affiliated with the People’s Daily, notes that many regions still require household registration (hukou) to access subsidized medical and pension insurance. This creates barriers to equal social protection between registered and non-registered residents.

The analysis noted that the issue is significant because, as labor markets become more integrated and population mobility increases, the separation between a person’s place of residence and their household registration has become increasingly common. For example, in Zhejiang, more than 16 million of the province’s 66 million residents do not hold local household registration. The proportion is even higher in Guangdong.

Advancing people-centered urbanization, therefore, becomes crucial. Policies such as establishing a unified population management system help ensure equal access to social security and public services, representing another important dimension of China’s emerging “investing in people” development strategy.

There are many other elements in the draft outline related to “investing in people” that I have not covered here. If you think there are important points that I missed, feel free to leave a comment and share your thoughts.

I’d like to end this newsletter with an explanation from Qiushi:

“投资于人”不是摒弃“投资于物”，而是追求两者之间的紧密结合和良性互动。物的投入与积累，最终是为了实现人的发展 ...... 二者的紧密结合，是对我国投资理念、方向、重点的提升和优化。

“Investing in human capital” does not mean abandoning “investing in physical assets.” Rather, it seeks close integration and positive interaction between the two. Investment in and accumulation of material resources ultimately serve the purpose of human development ... The close combination of “investing in human capital” and “investing in physical assets” represents an upgrading and optimization of China’s investment philosophy, direction, and priorities.

Please note that the analysis in this piece does not represent any official view, and reflects only my personal analysis and judgment.