China’s Legislative ‘Two Sessions’ Conclude, Just Weeks Before Trump’s Scheduled Visit to Beijing

China’s Legislative ‘Two Sessions’ Conclude, Just Weeks Before Trump’s Scheduled Visit to Beijing

March 2026

This year’s coverage of China’s ‘Two Sessions’ has largely been overshadowed by volatile global events. When President Donald Trump arrives in Beijing later this month for the first of several anticipated meetings with his Chinese counterpart in 2026, the ongoing US-led intervention in Iran will cast an inevitable shadow over diplomatic proceedings. Over the last two weeks, the escalating conflict has roiled global energy markets, upended supply chains and thrown maritime trade flows into disarray – with especially significant ramifications for China.

Amid this fraught international landscape, China’s annual legislative meetings wrapped up in Beijing this week, with the National People’s Congress officially adopting both the Government Work Report (GWR) and the refined outline for the 15^th Five-Year Plan for 2026-2030 (15^th FYP).

Significance of this year’s Two Sessions

Every year, China watchers look forward to the GWR as a temperature check on the Chinese economy and checklist of goals for the coming year. The much-anticipated GDP growth target is often seen as something of a ‘north star’ – signalling an alignment of priorities that percolate through every SOE boardroom and district government office in the country. Yet, this year’s Two Sessions were even more consequential as they marked the official kick-off for the 15^th FYP, setting the trajectory for the next chapter of China’s long-term modernisation strategy.

Our team previously wrote about the main priorities of the 15^th FYP, which were unveiled during last year’s Fourth Plenum in October. This year’s GWR, as usual, expanded on national-level priorities already outlined at last year’s Central Economic Work Conference (CEWC) – touching on everything from consumption promotion and infrastructure investment to green transition – while leaving room for more concrete policy details to emerge over the coming month. The two most distinct and noteworthy aspects of this year’s GWR are the revised growth target and the explicit doubling down on science and technology as a priority area – which the 15^th FYP outlines in more depth.

The headline figures from this year’s Two Sessions:

• GDP growth target is set at 4.5–5 percent, but with the expectation of “striving for better in practice”.
• Deficit-to-GDP of “around 4 percent” – in line with last year’s figure, which was a record high at the time, and prompted expectations of a more proactive fiscal policy.
• Consumer Price Index (CPI) increase of “around 2 percent” – identical to last year and indicating persistence of deflationary pressures.
• Urban unemployment rate of “around 5.5 percent” and the creation of over 12 million new urban jobs – identical to last year.

Revised growth target: reading between the lines

Over the previous three years, China had ambitiously set its annual growth target to “around 5 percent” – significantly higher than more conservative international forecasts, but vague enough to allow room for manoeuvre. As the economy has slowed, analysts have long expected some recalibration, more reflective of the Chinese leadership’s prioritisation of high-quality and sustainable growth over speed.   

Anyone following the succession of regional-level Two Sessions meetings over recent weeks will have noticed that some two-thirds of China’s provincial governments had lowered their growth targets for this year. By itself, a 4.5% target should have come as no surprise. More unusual, however, is presenting the growth target as a range, rather than a single figure – one of a handful of times over the last three decades this has been done. Add to that the unconventional caveat of “striving for better”, and there is even more space for interpretation.

Our reading is that China is prioritising much-needed structural reform across wide-ranging areas – from industrial overcapacity and “involutionary” competition to local government balance sheets – even if that comes at the expense of headline growth. But thanks to breakneck advances in new and strategic technologies – most notably AI – the leadership is optimistic that new, and even unforeseen, drivers of growth will continue to be unlocked over the short term.

Doubling down on sci-tech

Since President Xi Jinping first coined the term in 2023, ‘new quality productive forces’ have been a centrepiece of almost every major government and Party meeting. Successive government work reports have continued to namecheck a range of evolving technologies, from quantum computing to 6G. And while China’s ‘New Trio’ of green technologies – photovoltaics, lithium-ion batteries, and new energy vehicles – have long dominated the global market, the 15^th FYP has marked out a new elite class of frontier technologies as the “emerging pillar industries” of China’s modernisation. These include biomedicine, aviation and aerospace, the low-altitude economy, and – most strategically – semiconductors.

China’s doubling down on strategic technologies overlaps with fundamental national security concerns and signifies a longer-term, even generational priority – not just a reactive fallback in the face of US export controls. Perhaps nowhere is this more evident than in the state budget. When the Ministry of Finance delivered its budget report for 2026 last week, it noted a 426.42 billion yuan (US $61.7 billion) allocation to science and technology from the central budget and explicitly identified the sector as a “fiscal spending priority”. This represents a 10 percent increase on last year’s allocation – higher than for any other sector, including national defence (up 7 percent). The message is clear: regardless of budget strains, the leadership is insistent that China should be spearheading this “new round of technological revolution and industrial transformation”.

A key part of the puzzle is AI, which Premier Li Qiang explicitly mentioned no less than seven times in this year’s GWR. China’s “AI Plus” initiative – to be implemented under the 15^th FYP – envisages an ambitious roll-out of AI across the Chinese economy and society, affecting everything from industrial and agricultural optimisation, to personalised learning and auxiliary medical diagnosis at the individual level.

Reflecting the rapid pace at which the AI transformation has occurred even in the past few months, the latest text of the 15^th FYP mentions encouraging agentic, embodied, and swarm intelligence technologies, while exploring new “development pathways for general artificial intelligence” – more targeted language that was not in the initial draft last October. And while these developments will inevitably disrupt traditional labour practices the world over, China’s leadership seems optimistic about “actively leveraging” AI to create jobs and expand employment opportunities ​for the 12.7 million young people due to be graduating from university, judging by comments from Human Resources Minister Wang Xiaoping on the sidelines of the Two Sessions.

Looking beyond

In the few months since the Chinese and American leaders last met in South Korea, the Trump administration has vehemently redefined established international norms – from Greenland to Venezuela, and now, most consequentially in Iran – sending shockwaves through the global economy and disrupting the world’s most sensitive trade chokepoints. In this context, some have come to view China as the ‘adult in the room’ – a sentiment undermarked by recent high-level visits to Beijing from the leaders of Germany, Canada and the UK.

Like last year’s Fourth Plenum, the recent Two Sessions serve as a milestone for signalling China’s domestic stability, strategic coherence, and long-term, forward-looking vision, as exemplified in the tech-powered priorities of the 15^th FYP. While Iran may be the latest elephant in the room when Xi and Trump next meet, the fundamental drivers of competition underlying the world’s most important economic relationship will be just as powerful as ever.

To discuss your interests and needs and to sign up for any of these services and your customised “Two Sessions” analysis, please contact Chinapolicy@sandpipercomms.com

Related news & insights: