China's annual "Two Sessions"—comprising the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC)—convened in Beijing, outlining the nation's economic, technological, and political agenda for the coming years. The meetings emphasized strategies for economic growth, advancements in key technologies, and ongoing efforts to ensure loyalty within the military and government structures. Premier Li Qiang announced an economic growth target of 4.5% to 5% for the upcoming year, the lowest target set since 1991, reflecting acknowledgment of existing domestic and international challenges.
The "Two Sessions" Overview
The "Two Sessions" represent a significant event in China's political calendar, bringing together thousands of delegates from across mainland China, Hong Kong, and Macau for approximately two weeks.
Understanding the NPC and CPPCC
The NPC, serving as the Chinese Communist Party's (CCP) legislative body with 3,000 members, is constitutionally empowered to amend the constitution, appoint political officials, enact laws, and approve the national budget. Historically, the NPC functions as a deliberative body that approves policies formulated by the CCP. The CPPCC, an advisory body, considers proposals on various issues and includes members such as business executives and public figures.
Key Outcomes and Historical Context
During these meetings, "work report" speeches are typically delivered by the premier and, on occasion, by Communist Party chairman Xi Jinping. Key outcomes include setting official economic targets, announcing military budgets, and confirming changes within party leadership bodies. Past sessions have introduced significant policy shifts, such as the formalization of Xi Jinping's third term as leader in 2023 and the unveiling of plans for Hong Kong's national security law in 2020. Notably, the annual premier's press conference was canceled in 2024 without official explanation.
Premier Li Qiang announced an economic growth target of 4.5% to 5% for the upcoming year, the lowest target set since 1991.
Economic Strategy and the 15th Five-Year Plan
A central agenda item was the formal endorsement and launch of the 15th Five-Year Plan, which outlines Beijing's economic growth strategy and priorities for the 2026-2030 period.
Unveiling the 15th Five-Year Plan
The plan, developed within top leadership circles, emphasizes boosting domestic demand, enhancing China's capabilities in advanced technologies, and reducing economic dependence on external markets, particularly the United States.
Economic Growth Targets and Challenges
Premier Li Qiang's Government Work Report detailed China's economic performance over the past year and set a gross domestic product (GDP) growth target of 4.5% to 5% for the upcoming year. This target is lower than the actual 5% growth recorded last year and the approximate 5% target of the three preceding years, marking it as the lowest growth target since 1991.
Li acknowledged a "grave and complex" economic landscape, citing challenges such as a property slump, reduced consumer confidence, high youth unemployment, an aging population, trade frictions, international uncertainty, geopolitical risks, tariff wars, and an imbalance between strong manufacturing supply and weak domestic demand.
Balancing Industrial Self-Reliance and Domestic Demand
The government's strategy aims to balance economic revival through domestic spending with the goal of establishing China as a global leader in advanced technologies, independent of foreign components. While supporting domestic demand, the annual report indicates a continued prioritization of industrial self-reliance over major new stimulus for household consumption.
Specific Measures for Economic Revival
Efforts to boost consumer spending include the issuance of 250 billion yuan ($36 billion) in bonds to provide rebates for consumers trading in old cars and appliances. City-specific policies are expected to manage new housing supply and reduce unsold properties to stabilize the property market.
Technological Self-Reliance and Innovation
A core focus of the new plan is to leverage recent advancements in areas such as artificial intelligence, electric vehicles, and humanoid robotics to enhance national economic strength and international influence. There is a noted shift towards a proactive innovation policy, emphasizing the integration of technology and industry.
Decisive Breakthroughs in Core Technologies
The plan advocates for "extraordinary measures" to achieve "decisive breakthroughs" in core technologies, including chips and industrial machine tools. It also identifies "industries of the future," such as quantum technology, biomanufacturing, hydrogen and nuclear fusion power, brain-computer interfaces, embodied artificial intelligence, and 6G mobile communications.
Application and Workforce Development
Beyond innovation, the plan aims for large-scale application of these technologies across China's manufacturing sector and urban centers, coupled with investments in training and education to cultivate a skilled workforce for a "domestically driven, high-tech manufacturing future."
Resilience Against External Pressures
A key objective is to enhance China's innovative capacity and resilience against external pressures, particularly US sanctions. This includes prioritizing industrial self-reliance and enhancing domestic production of advanced semiconductors to mitigate the impact of restrictions on technological progress, especially in AI and military applications.
The long-term vision positions China to elevate its global economic role beyond being a manufacturing hub, aiming to become a key supplier of advanced technologies and a significant source of technological expertise in its foreign investments.
Military and Political Context
The "Two Sessions" occurred amidst ongoing military purges. Ahead of the meetings, the top political advisory body's standing committee voted to remove three generals, following the NPC's removal of nine generals the previous week. Reports indicate that General Zhang Youxia, a high-ranking military official, has been investigated for suspected corruption.
Ongoing Military Purges
Since 2022, over 100 senior officers have been reportedly purged or are under investigation, underscoring a consistent emphasis on political loyalty within the military leadership.
Defense Spending and Political Loyalty
The draft budget includes a 7% increase in defense spending, totaling 1.9 trillion yuan ($270 billion), a slight decrease from the 7.2% increases of recent years. The government report reiterated its commitment to "the Party's absolute leadership over the people's armed forces" and emphasized improving "military political conduct."
Consolidating Leadership
The ongoing changes are viewed as part of President Xi Jinping's broader efforts to consolidate leadership and ensure loyalty across China's governance structures, removing individuals or factions perceived to challenge his authority. This consolidation was further highlighted by the absence of 19 individuals, including nine high-ranking military members, from the delegate list, whose credentials were revoked due to disciplinary action.
Social and Domestic Challenges
Beyond economic and technological objectives, the plan is expected to address domestic issues such as weak consumption and the long-term effects of a decreasing birth rate and aging population. Efforts to narrow the income gap between urban and rural residents are also anticipated.
Social Policies and New Concepts
Social policies are also on the agenda, including strategies to combat "Involution"—excessive and self-defeating competition among Chinese companies. A new "Law on Promoting Ethnic Unity and Progress" is anticipated to codify China's approach to its 56 ethnic groups, promoting a common culture and identity. The concept of a "Low Altitude Economy," utilizing drones and other low-altitude vehicles to expand delivery and logistics networks, was also highlighted as a priority.