In his speech, President Xi Jinping said that the great Chinese rejuvenation is unstoppable.
Western media pounced on this, interpreting it as a proclamation that China’s rise was an unstoppable drive to become an aggressive hegemon. They suggested this posed an imminent threat to Taiwan. This reading was based on a mistranslation.
What Xi meant was that China would continue pursuing the economic development goals set out in the 14th Five-Year Plan. This was confirmed by the policy direction announced last week after the Fourth Plenum of the 20th Central Committee.
This is important for two reasons. First, it signals there will be no major disruption to policy direction. The 14th Five-Year Plan was the first stage of what has become a 10-Year Plan. That is very good for business engaging with China because it provides policy stability. The new industries that were favoured under the 14th Five-Year Plan will continue to be supported with policy initiatives.
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The second reason is that for China, the Five-Year Plans are not some nebulous objective which can be discarded when convenient. The plan provides a clear blueprint for policy commitment. In other words, you can trust that the plan will be implemented, and the business can confidently build investment decisions around these objectives. At times, policy development may not move as quickly as business would like, but in the long run, the objectives are achieved.
The 15th Five-Year Plan enhances the 14th Five-Year Plan, which had at its core an objective of change from ‘made in China’ to ‘designed in China’. When the latter was first announced, it alarmed the Americans. Their immediate and enduring reaction was that no one could displace America from its top position. China quickly downplayed the objective. It continued quietly pursuing its implementation.
The result is DeepSeek, alongside sophisticated and innovative electric vehicles, breakthroughs in battery technology, green industries and the digital economy.
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For investors, researchers and start-ups, this signals a surge of state support for AI, medical tech, healthcare tech and advanced manufacturing. If a project is strategic, scalable and promotes self-reliance, it is likely to receive government grants and assistance.
For businesses engaged with China, the 15th Five-Year Plan provides a clear roadmap reliably pointing to areas of opportunity.
Technical outlook for the Shanghai market
We do not need to wait for the critical ‘use by’ date on Nov 17. The Shanghai index has moved strongly above the resistance level near 3,888. The index is clustering along the upper edges of the short-term group of averages in the Guppy Multiple Moving Average (GMMA) indicator. This is very bullish.
The breakout has two upside targets, calculated using different methods.
The first is the upward sloping triangle pattern created by trend line B and the resistance level line A. The base of the triangle is measured, and this value is projected upwards to give a target near 4,050.
The second method uses the width of the trading bands. The width of the lower band is calculated and then projected above the upper edge of the band. This gives a target objective of around 4,100.
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This is just above the triangle pattern target, so it is reasonable to set an upside target of between 4,050 and 4,100.
The consistent separation in the long-term group of moving averages in the GMMA indicator confirms support for a move to the upside.
The long-term group of averages in the GMMA are not compressing. This suggests that investor support for the trend remains strong. The trend behaviour remains bullish. The index could pull back to the value of the long-term uptrend line A and remain in a bullish uptrend.
The key feature traders and investors will watch is the way the index behaves as it moves into the price target zones. A period of consolidation is the most likely development. These features all continue to confirm a bullish outlook for the Shanghai Index.
Daryl Guppy is an international financial technical analysis expert. He has provided weekly Shanghai Index analysis for mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”. He is a former national board member of the Australia-China Business Council. The writer owns Chinese stock and index ETFs
