In fact, as an expert on Chinese politics and the policies of the Communist Party of China, I have been following China’s Two Sessions for a long time. The year 2025 marks the conclusion of China’s 14th Five-Year Plan. There are many aspects of this year’s Two Sessions that I am particularly interested in. Especially all eyes will be on Beijing on March 5, 2025, as “China’s National People’s Congress” holds its annual meeting, a window for investors to understand government spending trends and China’s economic outlook over the coming year. With external pressures mounting, including threats by US President Donald Trump to impose more tariffs and domestic challenges such as a shrinking economy and a declining real estate sector, investors will be watching closely for any Chinese political and economic signals emerging from the meeting to help them understand where markets are headed next.
The National People’s Congress (NPC) is the highest authority of the People’s Republic of China and the sole branch of government in China. Under the principle of “unified power,” all state organs, from the State Council to the Supreme People’s Court (SPC), are subject to the authority of the NPC. The NPC has 2,977 members as of 2023, making it the largest legislative body in the world. Members are elected to five-year terms, and the NPC holds its annual session every spring, usually for 10 to 14 days, in the Great Hall of the People on the west side of Tiananmen Square in Beijing.
The NPC holds an annual plenary session lasting about two weeks, during which important bills are voted on and appointments are made to office, among other tasks. These sessions often coincide with meetings of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), an advisory body that includes representatives from various social groups. As the two main deliberative and consultative bodies in China, the NPC and the CPPCC are often referred to as the “two sessions” (Lianghui). The annual meetings of the NPC provide an opportunity for government officials to review past policies and make future plans for the nation. Because of the temporary nature of these plenary sessions, most of the powers of the NPC are delegated to the NPC Standing Committee (NPCSC), which comprises about 170 lawmakers and holds regular sessions every two months when the main body is not in session.
The NPC is the highest organ of state power in China, granted broad law-making powers under all four Chinese constitutions. It is formally headed by the Presidency of the State Council, the State Council, the Central Military Commission of the People’s Republic of China, the Supreme People’s Court, the Supreme People’s Procuratorate, and the National Supervisory Commission. The Constitution grants the Communist Party of China a leadership role, which makes the NPC different from Western parliaments; it does not serve as a forum for discussion between the government and opposition parties. For this reason, the NPC is often described as a Chinese legislative body that is different from Western systems or as having a greater influence on issues of great sensitivity or importance to the Chinese Communist Party “CCP.”. It plays a prominent role in passing legislation and laws that concern China’s domestic and foreign policy. The role of NPC deputies has also become to convey the complaints of Chinese citizens in all Chinese provinces and regions to the Chinese government for immediate and urgent resolution, in order to ensure the well-being of Chinese citizens in accordance with Chinese President Xi Jinping’s principle of realizing a well-off society.
Key issues to be discussed at this year’s two-session meetings in China 2025 include economic and political issues, with the annual growth target being one of the most anticipated topics at the start of each session. The government work report will be unveiled, which includes the official GDP target for the coming year, along with several other economic indicators such as the deficit-to-GDP ratio and inflation targets.
The report is also expected to outline national development priorities for the year, emphasizing the government’s plans to address domestic and global economic challenges. This year’s national economic and social development plan, including government budgets, will also be reviewed, providing a clear picture of China’s directions and policies for the coming years.
The National People’s Congress will also discuss and review new laws or amend existing ones, especially those related to key issues such as the Constitution, the Civil Code, the Supervision Law, and the Foreign Investment Law. This year, a draft amendment to the Law on Deputies to the National People’s Congress and Local People’s Congresses at Various Levels will be introduced, marking the fourth amendment since its enactment in 1992.
We expect China to tighten its support policy in response to the growing external shock from the United States of America. China is due to announce its annual military budget this week. Analysts expect it to increase amid tensions in the South China Sea and the Taiwan Strait.
Trump’s pressure could push Beijing to boost the support it has provided to the economy over the past year, such as cutting interest rates, easing local government debt pressure, and expanding subsidy programs for household goods.
On my personal analysis, I expect more investment in capabilities, especially in missiles, aircraft, and artificial intelligence supporting the military. For years, China’s defense budget has grown faster than its economic growth target. Here, we find out that the “Chinese Central Bank” and regulatory bodies pledge to support private companies.
The parliamentary meeting, held every spring, is expected to last about a week. About 3,000 representatives from across China will gather in Beijing’s Great Hall of the People, where Premier “Li Keqiang” will open the session with a work report. That report, along with a separate budget report from the finance ministry, will include key figures, including the official economic growth target for 2025, which is likely to remain at around 5 percent for the third year in a row, and the fiscal deficit, which will reveal how much Beijing is prepared to spend to reach that target.
On the sidelines of the “two sessions,” work reports will be delivered by heads of government bodies, such as the president of the Supreme People’s Court and the head of the Supreme People’s Procuratorate, on the performance of the country’s judicial and procuratorial systems. The event will also feature press conferences with senior government officials, including a press conference by Foreign Minister Wang Yi, who is expected to outline China’s positions and policies on international issues and major diplomatic issues. The Chinese government may also cut its inflation target to below 3 percent for the first time in more than two decades, possibly setting it at 2 percent in a sign that policymakers are waking up to the risks of persistent deflation.
The focus of the (2025 National People’s Congress) will be on boosting consumer spending, and policymakers may expand the country’s consumer goods exchange program, introduce measures to restore household confidence, and unleash long-term spending potential. Potential steps include increasing pensions for retirees, increasing basic social insurance subsidies, and providing financial support for families raising children. These plans are expected to be approved by China’s parliament by the end of the congress.
