China’s two sessions: key developments to watch
by Imran Khalid 04 March, 2025, 00:00
This year’s sessions carry even greater weight due to mounting global uncertainties and China’s pressing domestic priorities. Amid an evolving geopolitical landscape and economic challenges, the Chinese leadership will focus on multiple key areas, writes Imran Khalid
CHINA is set to hold its annual ‘two sessions’ starting on March 5, a highly anticipated event in the country’s political calendar. The two sessions, comprising the meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference, serve as a platform for evaluating past performance and setting new policy directions. During these sessions, the prime minister, the president of the Supreme People’s Court, and the procurator general of the Supreme People’s Procuratorate will present key reports for discussion and consultation. Over the years, these meetings have gained global significance, given China’s central role in the world economy and international affairs. With China expected to contribute 21 per cent of global economic growth over the next five years, investors, analysts, and policymakers worldwide are closely watching the proceedings. The outcomes of the two sessions will shape economic strategies, industrial policies, and international relations, directly influencing the global market.
This year’s sessions carry even greater weight due to mounting global uncertainties and China’s pressing domestic priorities. Amid an evolving geopolitical landscape and economic challenges, the Chinese leadership will focus on multiple key areas.
As 2025 marks the final year of China’s 14th five-year development plan, a comprehensive evaluation of the country’s achievements will be presented. The report will highlight areas where targets have been met or exceeded and additional efforts are needed. More importantly, discussions will likely offer glimpses into the contours of the upcoming 15th five-year plan, outlining strategic priorities for China’s future development. With China’s economy at a pivotal stage, policymakers will assess whether the existing structural reforms have yielded the desired outcomes and where recalibrations are necessary to ensure sustainable growth.
Technology and innovation will remain at the forefront of discussions, particularly in light of increasing western restrictions on China’s tech sector. President Xi Jinping has already emphasised the need for technological self-reliance and urged the development of high-quality new productive forces. The government is expected to unveil new policies and incentives to foster a culture of knowledge creation and technological advancement, ensuring that Chinese companies can compete globally without relying on foreign technologies. Investment in semiconductor manufacturing, artificial intelligence and quantum computing will be key to reducing dependency on western supply chains.
The private sector’s role in driving economic growth and technological progress will be another critical focus. Recently, president Xi met with prominent business leaders, including Jack Ma of Alibaba, Ren Zhengfei of Huawei, Wang Chuanfu of BYD and Lei Jun of Xiaomi, among others. He assured them that the government is committed to dismantling barriers, ensuring fair competition, and providing legal protection for businesses. Consequently, new policies, tools, and incentives are expected to emerge from the two sessions to further strengthen the private sector, boost entrepreneurship and attract foreign investment. With economic headwinds affecting various industries, the leadership will seek to reinforce confidence among private enterprises by addressing concerns over regulatory crackdowns and creating an environment conducive to long-term investment.
China has been grappling with a local government debt crisis and ongoing challenges in the real estate market. While the government has already introduced measures to stabilise these sectors, further discussions at the two sessions will likely result in additional policy interventions to prevent financial risks and ensure sustainable economic growth. The property sector, a major pillar of China’s economy, has been struggling due to liquidity crises and declining demand. The leadership is expected to introduce new mechanisms to manage debt restructuring while ensuring that homebuyers’ interests are protected. Revitalising the housing market without exacerbating financial vulnerabilities will be a delicate balancing act.
Following last year’s success in stimulating domestic consumption, policymakers will explore new ways to enhance consumer spending. This may include expanding trade-in programmes, introducing incentives for domestic purchases and promoting urbanisation and infrastructure development to drive economic activity. China’s growing middle class remains a crucial engine of economic growth and increasing their purchasing power through targeted fiscal measures will be a focal point of discussions. Additionally, policymakers may look into boosting e-commerce platforms and digital payment systems to further drive consumer engagement and spending.
One of the biggest challenges China faces is the increasing protectionism, decoupling and trade barriers imposed by western countries, particularly the United States. Washington has imposed sanctions on Chinese tech firms through measures such as the CHIPS and Science Act, targeting China’s semiconductor industry. Moreover, the US has recently increased tariffs on Chinese electric vehicles by 100 per cent, aiming to curb China’s dominance in this sector. The European Union has also raised concerns about China’s industrial policies, hinting at potential trade restrictions in key sectors such as green energy and telecommunications.
The two sessions will likely focus on crafting policies to mitigate these challenges by diversifying trade partnerships, expanding Belt and Road Initiative engagements, and developing alternative markets to counterbalance western restrictions. Notably, as some countries, like Panama, succumb to US pressure to exit the Belt and Road Initiative, China must refine its strategies to maintain global economic influence. Strengthening ties with global south nations, particularly in Africa and Latin America, will be a priority in ensuring that China’s economic footprint continues to expand despite geopolitical
headwinds.
At the heart of the two sessions is the unveiling of China’s economic growth targets for the year. The government work report, to be delivered by premier Li Qiang, will set policy priorities and national economic goals. Analysts anticipate a gross domestic product growth target of around 5 per cent, aligning with last year’s figures and exceeding the International Monetary Fund’s forecast of 4.6 per cent. This target will signal the government’s confidence in maintaining economic momentum despite external pressures and internal structural challenges.
Alongside the GDP target, budget allocations and fiscal policies will indicate Beijing’s commitment to economic recovery. December’s Central Economic Work Conference already pledged a higher budget deficit, increased special treasury bond issuance, and additional stimulus measures to sustain economic momentum. The two sessions will clarify the specifics of these fiscal policies and their expected impact on growth. Measures to boost employment, particularly among the youth, will also be a critical point of discussion as China’s job market continues to face pressures due to shifting industrial dynamics.
Beyond China’s domestic agenda, the world — particularly low- and middle-income nations — hopes that Beijing will introduce policies that contribute to global economic stability. Given the ongoing US-China trade war and escalating protectionism, many economies look to China for leadership in counterbalancing these disruptions and fostering sustainable growth. While tensions with the West persist, China is unlikely to be deterred; instead, it will double down on its efforts to sustain development, enhance innovation and contribute to global prosperity. Initiatives such as currency swap agreements, alternative trade settlement mechanisms and infrastructure investments in partner countries will likely be expanded.
The two sessions will also provide critical insights into China’s policy directions for 2025 and beyond. From evaluating the achievements of the 14th five-year plan to setting the foundation for the 15th, from advancing technological self-reliance to strengthening the private sector and from countering trade restrictions to boosting domestic consumption, China’s leadership will navigate a complex economic and geopolitical landscape.
As the world watches closely, Beijing’s policy decisions will not only shape China’s future but also have profound implications for global economic stability and development. With the challenges at hand, China should remain steadfast in its commitment to innovation, sustainable growth, and international cooperation — ensuring that it continues to serve as a driving force in the global economy. The policies and strategies outlined during these sessions will be critical in determining whether China can effectively navigate the headwinds it faces and continue on its path of economic transformation.
Dr Imran Khalid is a freelance contributor from Karachi.
Chinese Defense
