BEIJING — This week marks the commencement of China’s annual political event, where the nation’s prominent figures come together with thousands of provincial leaders. This significant gathering, tied to the Chinese Communist Party, aims to endorse pre-made decisions.
The event, known as the National People’s Congress, is expected to last for about a week. Despite its reputation as a rubber-stamp parliament, it serves a crucial role by highlighting government priorities for the upcoming year and providing guidance to party members and officials throughout the country. Its messaging remains consistent with previous years, focusing on fostering innovation and boosting domestic consumption.
The challenge remains how to effectively balance these dual objectives to revitalize the economy. Another key consideration is how the government plans to mitigate potential impacts from a new phase in the ongoing U.S.-China trade tensions. Experts are also closely monitoring hints about priorities for the next five-year plan, covering 2026 to 2030, as the current plan draws to a close.
Key scenarios to watch for at this year’s event include setting China’s economic growth target. As the Congress commences on Wednesday, Premier Li Qiang, the top economic authority, will reveal the growth target. Analysts anticipate a figure around 5%, consistent with previous years’ targets and slightly below the 5.5% target set in 2022, amid ongoing struggles with the sluggish real estate market and weak consumer spending.
Trade tensions with the U.S. continue to be an area of concern. With new tariffs imposed under President Donald Trump’s administration, the International Monetary Fund projects a lower growth rate of 4.6% this year.
Emphasizing government priorities, a recent commentary by the official Xinhua News Agency suggested a focus on boosting domestic demand and enhancing innovation in science and tech. Additional government support for the private sector is anticipated, particularly following President Xi Jinping’s meeting with business leaders, including Alibaba’s Jack Ma and Huawei’s Ren Zhengfei. During the Congress, a draft bill aimed at fostering a fairer business environment for the private sector will be discussed. Despite earlier economic measures falling short of expectations, observers remain cautious about transformative policies emerging from this Congress.
Jacob Gunter, from the Mercator Institute for China Studies, expressed skepticism about a drastic shift from industrial policy towards boosting consumption. The emphasis seems firmly on innovation to strengthen China’s self-reliance, with economic policies serving geopolitical aims more than developmental goals.
On the diplomatic front, Li is expected to address foreign policy and Taiwan, although significant focus will be on Foreign Minister Wang Yi’s insights on U.S.-China relations. In response to prior U.S. tariffs, China enforced retaliatory tariffs on American products, maintaining a stance that showed openness for negotiation but readiness to escalate if needed. Analysts point out how President Xi might use Congress meetings to communicate China’s position on bilateral relations.
Moreover, attention will be directed at China’s relations with Russia and its take on the Ukraine conflict, as recent statements from a G20 meeting highlighted China’s willingness to support peace efforts between the U.S. and Russia.
The National People’s Congress consists of nearly 3,000 delegates from various sectors, yet its role is largely ceremonial as it endorses pre-determined decisions instead of shaping legislation. Nevertheless, the Congress is key in revealing central government priorities and strategy. Simultaneously, the Chinese People’s Political Consultative Conference will convene, featuring diverse representatives from business, academia, and other fields, underlining the significance of these concurrent “Two Sessions” meetings.
