China's biggest political meeting is ending – what have we learned?

China’s Biggest Political Meeting is Ending – What Have We Learned?

China’s largest political gathering, the National People’s Congress (NPC), is set to conclude on Thursday. This significant event holds considerable authority, encompassing lawmaking, constitutional amendments, and state budget approvals. However, it primarily serves as a rubber-stamp parliament, endorsing decisions made by the highest ranks of the Chinese Communist Party behind closed doors. Despite its limitations, the NPC, alongside the Chinese People’s Political Consultative Conference (CPPCC)—collectively known as the two sessions—offers crucial insights into the priorities of the world’s second-largest economy. Here are the key takeaways from this year’s gathering.

China Aims to Showcase Stability

By Laura Bicker, China Correspondent
China’s ambition to emerge as the leading global superpower hinges on President Xi Jinping’s adept management of the economy. To foster growth, Xi seeks stability amid a tumultuous global landscape marked by an unpredictable U.S. president and ongoing conflicts in the Middle East. His strategies encourage domestic spending to stabilize a wavering economy, while his commitment to technological leadership aims to draw international clients to China for cutting-edge industrial innovations, including factory robots and AI systems.

Moreover, a significant push toward renewable energy production enhances China’s self-reliance, reducing dependency on foreign oil and gas, particularly from nations like Iran. The NPC’s meticulously choreographed proceedings—from the synchronized page-turning by delegates to the precise speeches—contrasts sharply with the chaotic political landscape in Washington, D.C.

Xi is positioning China as a beacon of stability, determined to enhance its economy and future. He feels bolstered by a trade truce following U.S. tariffs, with China attracting hesitant allies, such as the UK and Canada. Yet, he is acutely aware that much of China’s ascent will depend on effectively addressing internal economic challenges in the years ahead.

Technology as a Cornerstone for China’s Future

By Suranjana Tewari, Asia Business Correspondent
China is making a substantial investment in technology and innovation, targeting its next economic growth phase. The 15th Five-Year Plan outlines ambitious goals for scientific breakthroughs and the integration of artificial intelligence (AI) across multiple sectors. As U.S.-China tensions heighten, technological advancement is framed not just as an economic necessity, but a strategic imperative.

Research and development spending in the tech sector is projected to increase by about 7%, while the government has launched the AI+ initiative to weave AI into industries like manufacturing, logistics, healthcare, and education. Investments are also being funneled into semiconductors, robotics, biotechnology, and pioneering fields such as 6G communications and brain-computer interfaces.

In contrast to an economy once heavily reliant on real estate and infrastructure, policymakers are now prioritizing technological enhancement and industrial modernization. The GDP growth target has been set at a conservative 4.5% to 5%, the lowest since 1991, reflecting expectations of slower expansion. Analysts caution that achieving this target may prove challenging unless consumer spending rebounds, as current demand remains subdued relative to other major economies.

Plans to Stimulate Consumer Spending

By Stephen McDonell, China Correspondent
Economists have long urged China to shift towards a sustainable economic framework, reducing reliance on exports and fostering domestic consumption. At this NPC, leaders pledged to vigorously stimulate consumer demand, a message that resonates positively. However, many remain skeptical about whether the proposed measures will suffice.

Cultural tendencies favoring saving over spending, compounded by declining home values and high youth unemployment, have made consumers increasingly hesitant. Raising incomes could be a potential solution, with NPC spokesperson Lou Qinjian hinting at future plans to address this but offering no specifics.

One modest initiative announced was the increase in government spending on childcare, aimed at freeing up disposable income for families. While minimum retirement benefits for rural and non-working urban residents were raised, the meager increase—approximately $3 (£2.24) per month—has drawn ridicule on social media.

Other plans, such as enhancing housing support for newly married couples and improving parental leave policies, lacked substantial details. Though officials may argue that the NPC is about setting the tone, the absence of specifics raises questions about the tangible impact on consumption.

Conclusion

As China’s biggest political meeting concludes, it’s clear that the path ahead is fraught with challenges and opportunities. The focus on stability, technological leadership, and consumer spending encapsulates China’s ambitions as it seeks to navigate a changing global landscape. However, whether these strategies will translate into significant economic improvements remains to be seen. The NPC may set the tone, but concrete actions will ultimately determine the effectiveness of these ambitions.