China's 15th Five-Year Plan (2026-30) is more than an economic policy document. It is a vision of an economy that is more innovative, more technologically advanced, greener, more resilient and focused on improving the quality of growth.

For many in Europe, it is time to look at China with greater realism and attention. Too often, China is still viewed through outdated perspectives: as the world's factory, as a low-cost manufacturing giant, or as an export-led economy competing mainly on scale and price. The new plan shows that these views are no longer relevant.

The new plan points to a different development model — one in which innovation, growth, sustainability, and resilience are closely interconnected. Rather than treating these priorities separately, China brings them together into a more integrated framework to strengthen the foundations of its economy in the years ahead.

The implications are significant. China is positioning itself not only as a major manufacturing power, but also as a leader in several industries that are likely to shape the future: semiconductors, advanced materials, robotics, intelligent vehicles, biotechnology, industrial software, digital infrastructure, and artificial intelligence applied to the real economy.

This is especially evident in the emphasis placed on AI. In China's development strategy, AI is not merely a technology sector entity or a source of digital consumer applications, but increasingly a part of the infrastructure of a modern economy, embedded in smart manufacturing, logistics, public services and industrial management. In this environment, the next phase of global competition will depend less on labor costs than on the ability to combine innovation, data, computing power and industrial scale.

Europe should pay closer attention to this approach. European discussions on AI are often dominated by regulation, ethics, and risk governance. These debates are important and should not be avoided. However, China's approach highlights another dimension that is equally important: industrial application. If Europe wants to remain competitive, it must ensure that AI is discussed not only in legal or theoretical terms, but also approached as a driver of productivity and industrial transformation.

At the same time, China's new development strategy confirms that the country remains a crucial market for European companies. The strengthening of domestic demand, the expansion of services, the acceleration of the green transition and industrial transformation all point to continuing opportunities in areas where Europe has strong capabilities: advanced engineering, healthcare solutions, energy efficiency, industrial automation, premium consumer goods, high-end components and specialized services.

For European business leaders, this means China should not be seen only through the lens of competition. It should also be understood as a market of scale, sophistication and growing technological ambition. Companies with strong brands, high-quality technologies and a long-term commitment can find substantial room for growth and cooperation.

However, success in China requires a more serious and strategic approach. The days when foreign companies could rely mainly on exports or on a limited commercial presence are long over. As China's industrial ecosystem becomes more sophisticated, foreign firms will need deeper engagement, stronger local partnerships, a better understanding of regulatory and data frameworks and a greater willingness to adapt to local market dynamics.

Another major feature of the new plan is its strong emphasis on green development. China's commitment to energy transition, industrial efficiency and sustainable infrastructure creates immense possibilities for cooperation with Europe. In a world facing climate pressure, energy insecurity, and industrial disruption, China and Europe have strong reasons to work together in areas such as clean technology, electric mobility, smart grids, industrial decarbonization and green finance.

Taken together, these dynamics highlight why Europe should avoid simplistic readings of China's development path. China is certainly a strong technological and industrial competitor in many areas. But it is also an essential partner in several of the defining transformations of our time.

The broader lesson of China's new Five-Year Plan therefore goes beyond individual policy priorities. It reflects a development direction that combines long-term planning, industrial policy, market mechanisms and technological ambition in pursuit of national capability, stability and resilience. Europe need not agree with every aspect of this model to understand its coherence, but it does need to study it with fewer assumptions inherited from the past.

A clearer understanding of China's trajectory is no longer only useful but strategically necessary for Europe to manage competition more intelligently and build a more balanced, constructive and forward-looking partnership with China in the years ahead.

The author is the president of China-EU, a Brussels-based association.

The views don't necessarily represent those of China Daily.

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