China’s annual “Two Sessions” — the meetings of the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC) — open in Beijing today and tomorrow respectively. Against a backdrop of slowing economic growth, rising external trade pressures and heightened geopolitical uncertainty, this year’s gatherings are viewed as a key window into the country’s policy direction.
Economic issues are the central focus. Premier Li Qiang is set to deliver the government work report at the NPC session, outlining the 2026 economic growth target and related fiscal and monetary policy plans. Markets are watching closely to see whether the growth target will remain around 5% or be adjusted downward. Authorities have previously signaled a “more proactive fiscal policy” and a “moderately accommodative monetary policy.” Attention will centre on the budget deficit ratio, the scale of local government special bonds and the issuance of special treasury bonds, as well as whether resources will shift further toward boosting consumption and supporting livelihoods.
Official data shows China’s GDP grew by 5% in 2025, though subdued price levels indicate domestic demand remains weak. Several provinces have already lowered their growth targets for this year. The International Monetary Fund forecasts China’s growth could slow to 4.5% this year. Amid a prolonged property downturn and external demand pressures, observers are focused on whether measures to prioritise domestic demand and stimulate consumption will be implemented in concrete terms.
The NPC session will also review the draft outline of the 15th Five-Year Plan for National Economic and Social Development, setting the direction for the next five years. Authorities have recently emphasised building a strong domestic market and advancing technological self-reliance, with semiconductors, artificial intelligence and critical materials expected to remain policy priorities.
Military spending and defence policy are also under scrutiny. In 2025, China’s defence budget increased by 7.2%, exceeding the economic growth target. Observers will watch whether this year’s defence spending maintains the recent trend of single-digit increases and how official language balances military modernisation with economic pressures. Adjustments to NPC delegate qualifications and changes in the size of the military delegation are also seen as indicators of shifts within the senior leadership.