Two Sessions 2025: what to expect

China is gearing up to organise the Two Sessions starting from March 5 next month. The Two Sessions refer to annual meeting of National People’s Congress and Chinese People’s Political Consultative Conference (CPPCC). Prime Minister of China, President of Supreme People’s Court and Procurator General of Supreme People’s Procuratorate will present their reports for discussion and consultation.

Nationally, it has always been an important event as the leadership evaluates last year’s performance and presents the agenda for next year, especially the growth targets.

During last few years, the Two Sessions have gained global attention due to China’s increasing importance and role on the world stage. Currently, China is at the centre of global economy, with an anticipated growth contribution of 21pc over the next five years. It holds the position of world’s largest trade partner. It is at the forefront of innovation, technology development and penetration. China has become a significant pull factor for the global economy. As a result, global media are beginning to follow updates about the Two Sessions and publish analyses, while speculating about potential discussions and outcomes, as these will directly impact the global economy.

However, this year’s Two Sessions acquired special importance due to troubled global dynamics and China’s domestic priorities. By analysing the current situation at global and domestic levels, it is likely the Two Sessions will deliberate on multiple areas, and a few have been discussed below.

2025 is the last year of 14th Five-Year Development Plan. A comprehensive report on the plan’s evaluation is expected to be presented. The report will provide some information on what China has achieved during last five years. How many targets have been met and how many have exceeded expectations. Where are more efforts needed?

The leadership will deliberate on the contours of 15th Five-Year Development Plan. Thus, one can hope outcome of Two Sessions will provide us with glimpses of 15th Plan.

The leadership will deliberate on achieving self-reliance in technology development and promoting an innovation culture. President Xi has already highlighted tech self-reliance as a key goal in his meeting with members of a united front last month. Moreover, President Xi believes to sustain growth, implement a high-quality development philosophy and ensure leading role of high-quality new productive forces, China must lead the race for innovation and technology development and find new growth drivers and actors.

Now, he is trying to ensure China must be the leader in innovation and technology development. He is convinced for that purpose, the CPC and the State will have to create a culture of knowledge creation, right policies and incentives. Thus, the leadership will devise policies and packages to help Chinese companies achieve self-sufficiency.

The Two Sessions will deliberate on enhancing and strengthening role of private sector. It has been marked as a key factor in accelerating economy, development and self-reliance in technology development.

Recently, President Xi met with leading private sector leaders, including Jack Ma Alibaba, Huawei’s Ren Zhengfei, BYD’s Wang Chuanfu, New Hope’s Liu Yonghao, Will Semiconductor’s Yu Renrong, Unitree Robotics’ Wang Xingxing and Xiaomi’s Lei Jun and others. The business leaders have put a few proposals in front of President Xi. President Xi assured them “the Party and the country will ensure dismantling all hurdles and equal access to factors of production in accordance with the law, compete in the market on an equal footing and are protected by the law as equals”.

Thus, the Two Sessions are expected to formulate new policies, methods, tools, and incentives to further enhance the private sector’s role.

The leadership will look into the issues of local governments’ debt and the real estate market. The CPC and government are already working on these two areas. They have extended different packages to address the challenges of these sectors.

Building on the success last year, the leadership will have to find ways to enhance domestic consumption. Thus, there would be deliberation on further accelerating the national programme to promote consumer trade-in or develop new programmes.

The leadership will have to prepare China to face the Western countries’ problematic attitudes, sanctions, protectionism, decoupling, deglobalisation, etc. They will have to focus especially on technology sector, which is already facing challenges and strong opposition from the US and the West. The US has imposed sanctions on Chinese tech companies by introducing CHIPS and Science Act, among other measures.

The CHIP and Semiconductor industries are prime targets of sanctions. They want to prevent China from matching the US and its allies in designing and producing CHIPs and semiconductors. They are agitated and angry over China’s excellent performance in the top 44 critical technologies (China is a leader in 37 out of 44 technologies).

Therefore, the US seeks to curb China’s progress to maintain its leadership in these sectors. Moreover, it has targeted automobile industry, and recently increased tariffs on EVs from China by 100pc. The US realised it could not compete with China, so the best option was to sanction or increase tariffs on EVs from China. TikTok is the most recent victim on this front.

On the other hand, President Trump has unleashed a new wave of trade wars. He has imposed 10pc new tariffs on various products from China. He is also pushing countries to rethink their economic linkages with China and withdraw from Belt and Road Initiative. Panama scumbled under pressure and decided to leave BRI. Thus, China will have to devise policies and find new markets to avoid negative impacts of sanctions and trade wars.

Lastly, the most crucial area involves establishing growth targets and economic stimulus policies, while identifying new drivers and methods for stimulating growth. The analysis of aforementioned areas (including global challenges and impacts, debt and real estate crisis, level of capacity for technology development and innovation, and domestic market potential), along with additional factors, is expected to assist leadership in developing appropriate set of policies, plans, tools and practices.

However, the world, particularly low- and middle-income countries, expects China to create policies and plans that can also contribute to global economic growth and development. These policies are necessary to reduce or mitigate negative effects of President Trump’s trade war. As a result, entire world is focused on outcome of Two Sessions.

In conclusion, Chinese leadership is aware meeting everyone’s expectations will be challenging, given the numerous, complex and multifaceted challenges at hand.

Additionally, global powers, such as US, have chosen to decouple, accelerate trade wars, impose sanctions and advocate for a “my country first” approach. However, China should not succumb to these challenges. Instead, it should intensify its efforts to contribute to the goals of sustainable development, prosperity and lasting peace. Ultimately, China must aim to serve as a beacon of hope.