Medium to long-term reforms are advancing the deployment of "future industries." On the afternoon of March 12, the Fourth Session of the 14th National People's Congress concluded, approving multiple resolutions and laws, including the 2026 Government Work Report and the Outline of the 15th Five-Year Plan for National Economic and Social Development. These documents repeatedly mention "future industries," marking the third consecutive year the Government Work Report and the second time a Five-Year Plan has emphasized their development.
In 2021, the 14th Five-Year Plan proposed "proactively planning for future industries." In 2024, seven ministries, including the Ministry of Industry and Information Technology, issued an opinion to promote the innovative development of future industries, describing them as forward-looking emerging sectors driven by cutting-edge technologies, currently in nascent or early industrial stages, characterized by significant strategic importance, leadership potential, disruptiveness, and uncertainty. The opinion set goals for 2025 and 2027, outlining six major directions: future manufacturing, future information, future materials, future energy, future space, and future health. The 2026 Government Work Report calls for cultivating and strengthening emerging and future industries, establishing mechanisms for investment growth and risk sharing, and specifically developing future energy, quantum technology, bio-manufacturing, embodied AI, brain-computer interfaces, and 6G. The 15th Five-Year Plan outline dedicates a section to "forward-looking layout of future industries," explicitly listing quantum technology, bio-manufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied AI, and sixth-generation mobile communication.
From a capital market perspective, which future industry directions warrant focus? Synthesizing the 2026 Government Work Report and the 15th Five-Year Plan, key areas include quantum technology, bio-manufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied AI, and 6G. The head of the National Development and Reform Commission stated that China will focus on building these six major future industries, which are on the eve of technological breakthroughs. Additionally, investor interest in commercial aerospace and space-based solar power within the A-share market is high; these industries are also in early developmental stages, sharing characteristics with the aforementioned future industries.
Quantum Technology: This encompasses quantum computing, quantum communication, and quantum precision measurement. Quantum computing is foundational, utilizing qubits that can exist as both 0 and 1 simultaneously, enabling massive parallel processing. China is a global leader, having demonstrated "quantum advantage" in multiple physical systems. While hardware like the "Jiuzhang 3.0" and "Origin Wukong" has advanced, the challenge lies in commercial-scale application. Potential uses include AI, cryptography, materials design, and financial modeling for risk management and portfolio optimization. Quantum communication aims to secure information transmission, and quantum measurement can enhance accuracy in resource exploration and medical detection. The 15th Five-Year Plan emphasizes building an integrated space-earth quantum communication network and developing fault-tolerant quantum computers.
Bio-manufacturing: Representing "green manufacturing," it uses biological processes to produce materials, with applications in pharmaceuticals, materials, chemicals, energy, and metallurgy. It is more efficient and sustainable than petrochemical-based methods, with experts estimating 70% of manufactured goods could potentially be produced this way. The integration of AI is a growing trend. The plan focuses on breakthroughs in key technologies like enzymes, intelligent biobreeding design, and smart fermentation, promoting innovation in bio-pharmaceuticals, bio-energy, and accelerating R&D for cell/gene therapies and vaccines.
Hydrogen and Nuclear Fusion Energy: These are representatives of "future energy." "Green hydrogen," produced using renewable energy, is a major trend, offering high energy density and aiding renewable energy integration, though storage and transport challenges remain. China's hydrogen industry plan and the 15th Five-Year Plan outline goals for improving equipment, storage technology, and expanding applications. Controlled nuclear fusion, or the "artificial sun," is clean and safe. China has made significant strides but faces challenges in materials and talent. The plan targets breakthroughs in key technologies like fuel cycle and high-performance lasers.
Brain-Computer Interface (BCI): BCI technology translates brain signals into commands, aiding patients and enabling mind-machine interaction. China is competitive in non-invasive techniques and is catching up in invasive technologies, but challenges remain in signal acquisition and interpretation. A 2025 policy document set development goals. The plan emphasizes R&D on hardware/software and promoting applications in healthcare and rehabilitation.
Embodied AI: This combines a physical "body" with an AI "agent," distinct from disembodied AI or standard robots. Humanoid robots are seen as ideal carriers due to their compatibility with human-centric environments. China is a frontrunner, but challenges include AI model generalization due to data scarcity. The plan calls for building training grounds, integrated algorithms, and accelerating the development and application of humanoid robots, with potential demand rising due to an aging population.
6G, Commercial Aerospace, and Space-Based Solar Power: 6G aims for integrated air-space-ground coverage beyond speed, with envisioned applications like immersive communication and AI integration. It remains in early R&D in China. The plan advocates for advancing 6G innovation and building out satellite internet, a key component. Commercial aerospace is exploring business models amid intense competition for limited orbital slots. China has submitted applications for over 200,000 satellites. Cost reduction and sustainable models are needed. Solar power is the primary energy source for satellites. Space-based solar power also includes concepts for beaming energy to Earth, potentially powering future AI data centers, but faces technical and production challenges.
How should one position for future industries? The investment logic differs from emerging industries. Most future industry areas are in very early stages within the A-share market. The emphasis should be on "industry development" rather than "immediate investment." Emerging industries often have established companies and clearer competitive landscapes, allowing for fundamental analysis. Future industries, however, are earlier-stage, with ongoing R&D and exploration. Directly related companies may be small, unprofitable, or listed entities may have minimal exposure, leading to thematic, volatile, and fragmented market performance. In the short-to-medium term (around one year), it is advisable to monitor progress but not necessarily seek immediate investment, being mindful of valuation risks. Over the long term (more than one year), as technologies mature, applications become clearer, and more robust companies emerge, concrete investment opportunities may materialize.
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