China 15th Five Year Plan
China’s quantum technology sector is entering a transformative new phase as the 15th Five-Year Plan (2026–2030) positions the industry as a central pillar of future economic growth. In a strategic pivot from academic research to industrial application, the new plan identifies quantum technology as the foremost of seven “future industries” destined to become new economic engines. This signals a significant elevation of the sector’s role, moving beyond laboratory breakthroughs to a robust commercialization push backed by massive state investment and targeted policy support.
A Market in Rapid Expansion
The scale of China’s quantum ambitions is reflected in its recent market performance. Quantum computing alone totaled RMB 11.56 billion (US$1.61 billion) by 2025, growing over 30% annually. From 93 in 2023 to 153 in 2024, the number of companies in the space increased by 40%.
The way the government distributes resources has changed, which is driving this rise. While university research grants were the main focus of the 14th Five-Year Plan, commercialization through government procurement, manufacturing subsidies, and large-scale application deployments is given priority in the 15th Plan. The National Venture Guidance Fund has granted RMB 121.8 billion (US$17.5 billion) to three regional quantum-focused funds to meet these goals.
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The Three Pillars of Quantum Tech
Three subsectors currently comprise China’s quantum landscape, each with a distinct level of maturity:
- Quantum Communications: With around 60% of industry income coming from this subsector, quantum communications is currently the most dominating. China has the world’s longest operational quantum backbone, the 10,000-kilometer Beijing-Shanghai trunk line, and the 2016 Micius satellite, the sole specialized quantum communications satellite. ICBC exploits quantum encryption for remote data transfer, producing money.
- Quantum Computing: Quantum computing is the fastest-growing area, expected to account for 41% of the quantum market by 2025. 107-qubit Zuchongzhi 3.2 superconducting processor and 504-qubit Tianyan-504 cluster system are hardware milestones. Hanyuan-1 neutral-atom quantum computers began international commercialization in 2025.
- Quantum Sensing: Quantum sensing is being used into high-tech production, albeit at an earlier stage of commercialization. Quantum sensors are already being used by battery industry titans like CATL and Gotion High-Tech to ensure quality in their manufacturing processes.
Geographic Clusters of Innovation
Industry has converged around four geographical hubs with particular expertise:
- Hefei: China’s “quantum capital,” it’s home to USTC and Origin Quantum. Superconducting computer manufacture and advanced research and development continue to be centered there.
- Beijing: With a strong emphasis on quantum sensing and measurement, Beijing serves as the national center for standards and policy.
- Shenzhen & Guangdong: In addition to having the first photonic quantum computer production line in the world, Shenzhen and Guangdong place a strong emphasis on commercial products and large-scale manufacturing.
- Shanghai & Yangtze River Delta: Using the region’s concentration of banks and advanced manufacturing, the Shanghai & Yangtze River Delta cluster focuses on financial services and industrial applications.
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Opportunities and Obstacles for Foreign Players
Foreign involvement is nuanced in the 15th Five-Year Plan. With effect from February 2026, the revised Foreign Investment Encouraged Catalogue formally creates a preferential framework for quantum computing research and development, providing reduced corporate tax rates and tariff exemptions for businesses with foreign investments.
But “bifurcation risks” continue to be a problem. Government and defense-related sectors are still mostly closed, although commercial applications in the healthcare and financial sectors are accessible to foreign suppliers. Chinese efforts at “domestic substitution” have also been encouraged by Western export restrictions on sophisticated components.
Nevertheless, there are still supply chain gaps where international businesses can have a big impact. Domestic Chinese skills continue to lag below international levels in areas such as cryogenic control systems, high-end measurement tools, and specialist materials like Helium-3. Developing software and algorithms also gives international businesses a way to license technology to Chinese industrial customers without having to deal with the restrictions on exporting hardware.
The Closing Window
Experts in the field say that while domestic “state-supported champions” like China Telecom Quantum Group and QuantumCTek quickly advance their skills, the opportunity for breaking into China’s quantum market is closing. A significant shift is marked by the 15th Five-Year Plan quantum is now a competitive industrial necessity rather than merely a research endeavor.
The 2026-2027 timeframe is seen as a crucial opportunity for international companies to take action, since it coincides with the peak deployment of regional quantum investment funds. Those that can form alliances and handle the intricate regulatory landscape today could land a spot in a market that is quickly rising to the top of the global quantum patent filing and infrastructure rankings.
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