China kicks off its biggest political meetings of the year this week as additional tariffs from the United States loom and the leadership in Beijing looks to address what Chinese President Xi Jinping has called “complex and multifaceted” economic challenges.
Starting on Tuesday, thousands of Chinese elites and lawmakers will begin gathering in the Chinese capital for the “Two Sessions,” or “lianghui,” which will set and discuss a wide range of policy agendas for 2025.
A gathering of a broad swath of representatives, from business and academia to those inside the government and the party, called the Chinese People’s Political Consultative Conference, meet on Tuesday. The day after that, China’s rubber-stamp parliament, the National People’s Congress, or NPC, will begin its annual legislative session.
Premier Li Qiang will deliver the highly anticipated government work report at the opening meeting of the NPC, outlining the Chinese government’s economic growth target for 2025 and other key economic policies.
This year’s meetings come amid a sluggish economy, weak domestic demand, low investor and consumer confidence, a lingering property sector crisis and a looming trade war with the United States. The additional 10% tariff that the U.S. government has threatened to impose on all Chinese imports is set to take effect on Tuesday.
Faced with a slew of domestic and external challenges, analysts say this year’s NPC will be an important occasion for the Chinese leadership to project “political unity” and demonstrate that “China is on the right track to greatness under the leadership of Xi Jinping.”
“For Beijing, strong leadership from the Chinese Communist Party and strengthening China’s economic and technological resilience against external shocks are more necessary than ever – and the only way to ensure China’s long-term rise,” said Nis Grunberg, an expert of Chinese politics at the Mercator Institute for China Studies, or Merics, in Germany.
In an article published in the Chinese Communist Party’s magazine Qiushi on Saturday, President Xi Jinping said some top priorities for economic work, which he characterized as “complex and multifaceted,” include facilitating an efficient relationship between the market and the government, ensuring a balance between supply and demand, optimizing the allocation of resources and balancing quality and scale in development.
As the Chinese economy continues to face “difficulties and challenges,” some experts say Beijing’s 2025 official growth target will be “around 5%,” matching the GDP increase in 2024.
The 5% target “reflects a tacit acknowledgement of economic headwinds but signals continuity and stability,” said Lizzi Lee, a fellow on Chinese economy at the Asia Society Policy Institute.
Since all Chinese products exported to the U.S. could face a 20% tariff starting Tuesday, Lee said the Chinese government will focus on rolling out policies to boost domestic demand and consumption.
“We are likely to see stronger policy efforts to revitalize spending beyond just trade-in subsidies for cars, home appliances and digital products,” she told VOA in a written response. She added that Chinese policymakers are likely to pour resources into live-stream commerce and that the “silver economy” – goods and services for the elderly – will be areas that Chinese policymakers will likely pour resources into.
Additionally, Lee thinks China may also raise the fiscal deficit, set up state-backed investment funds to support strategic industries, and roll out policies to “push banks to support struggling local economies.”
Tech innovation and the private sector
In addition to boosting domestic demand and consumption, the Chinese government is looking to expand high-tech manufacturing and drive innovation by boosting private sector sentiment and encouraging leading tech giants to expand both domestic and international operations.
During a symposium with leaders from several Chinese tech giants on Feb. 17, Xi “urged efforts to promote the healthy and high-quality development of the country’s private sector.” He also vowed to dismantle obstacles that prevent private companies from “competing in the market fairly.”
Those remarks stood in sharp contrast to a series of crackdowns that the Chinese government has initiated against tech giants such as Alibaba, Tencent and Ant Group since 2020.
Some analysts say Beijing may reinforce state-led support for companies working on artificial intelligence or semiconductors, while ensuring these private companies are aligned with the national priorities to help China remain strong in the ongoing competition with the U.S., including in several high-tech sectors.
“The private sector has an important role to play, but always under the guidance of the party,” Antonia Hmaidi, a senior analyst at Merics, said during a webinar on Feb. 27.
While “AI is a fundamental priority for party and state, a comprehensive law is unlikely to emerge at the Two Sessions as the party-state grapples with using AI for development while ensuring its safe use,” she added.
Tariffs countermeasures
On the foreign policy front, the international community will be closely watching how China decides to counter the tariffs that the U.S. government has vowed to impose on Chinese imports.
Lee at ASPI said the Chinese government may double down on supply chain resilience, diversifying export markets and strengthening its domestic tech ecosystem.
“I expect policies that emphasize boosting domestic demand to offset trade risks, increasing fiscal support for industrial upgrading and further deepening economic ties with ASEAN, the Middle East and the Global South,” she told VOA.
On Monday, Chinese state-run tabloid Global Times reported that the Chinese government is “studying and formulating” countermeasures against the U.S. tariffs, including potentially targeting U.S. agriculture and food products with tariff and non-tariff measures.
In light of the changes in foreign policy that the U.S. has implemented since President Donald Trump returned to the White House in January, Wen-ti Sung, a Taipei-based political scientist for the Australian National University, said China will try to “project an image of continuity and certainty” in terms of foreign policy during the Two Sessions.
“It used to seem like China was the revisionist power in the international system, but as the U.S. changes the rules of the game that it set up, China will try to repackage itself as the pro-status quo power,” he told VOA by phone.
