Geo-Economics, Geo-politics of Chinese Two Sessions: Expectations, Estimations and Policy Options

The US Donald Trump’s euphoria of high and reciprocal tariffs have produced immense chaos, uncertainty and massive disruption in the international trading system, supply chains and engagements. The latest Oval Office episode with the Ukrainian President Zelenskyy is the demise of international diplomacy and destruction of peaceful dialogue and development which has further highlighted the strategic importance and global impacts of the Chinese Two Sessions to be held in the next week in Beijing. Hopefully, the Chinese Two Sessions (CTS) will give impetus to economic globalization, international cooperation and openness through its value additions and befitting economic policies.
The upcoming CTS have become one the hottest topics of the global media. The stock exchanges, money & commodity markets around the globe anxiously waiting for the holding and outcome of the CTS in terms of GDP target, economic priorities, industrial policies, investment preferences, new policies supporting further openness, modernization, development and incentives to private sector and last but not least, state’s financial packages countering the US President Trump thundering tariffs and ungracious diplomatic encounters.
Thus it has tremendous value of geo-economics and geo-politics gearing the Global South and the entire world towards greater economic cooperation, rescuing the world from the debate of win-loss to win-win equation, protectionism to massive integration and last but not least, mutual respect. Additionally, the CST would announce a new recipe of global development, strategic road map for international cooperation and law based global governance.
Obviously, it has immense geo-economic value for greater economic globalization, international cooperation, opening-up, modernization, digitalization, artificial intelligence and global shared prosperity.
Furthermore, the US President’s inglorious trade tariffs have already put the international trade, economy, industry and supply chain in dire situation immediately needs a stable economic world order for achieving a just, fair and free trading system and holding of this year two session has infinitely enhance its importance for mitigating the spillover socio-economic and geopolitical ramifications of thundering tariffs.
The CTS also has specific geo-political effects because the international countries and communities are worried about the US global exit policy leaving it from WHO, Paris Climate Change, Human Right and even from WTO thus holding of the Chinese two sessions have become a hot topic in the international mass media.
Hopefully, during the annual legislative and political consultative sessions a slew of social and economic development goals will be announced. It is predicted that this year the promotion of high-quality development of the BRI will also be announced.
It seems that this year’s CTS the third session of the 14th NPC and the third session of the 14th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), the top political advisory body are set to kick off next week, high-quality development of the BRI has again become a hot topic.
This year marks the 12th anniversary of the BRI. Over the years, the BRI has evolved from a vision into reality, and from general framework into concrete projects, becoming the world’s most popular international public good and the largest international cooperation platform.
The tone-setting Central Economic Work Conference in December, during which economic work for 2025 was arranged, urged solid progress in high-quality Belt and Road cooperation and improvement in the overseas comprehensive service system.
In annual CTS thousands of leaders, bureaucrats, experts, reporters, and celebrities from across the country flock to Beijing for a week of political pageantry.
Actually, the two sessions refer to the concurrent annual meetings of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), which opens on March 4, and the National People’s Congress (NPC), which begins on March 5. These meetings are expected to conclude on or around March 11.
Both institutions answer to the Chinese Communist Party, led by General Secretary Xi Jinping. The CPPCC National Committee, with 2,169 members, serves as the overarching organization of the United Front system, which mobilizes various social groups to support and advise the Party. Meanwhile, the NPC, with 2,977 delegates, functions as a single-chamber parliament that is, at least notionally, the supreme organ of state power.
Now, attention shifts to how much Beijing is willing to boost stimulus, support businesses, and respond to Trump’s trade policies.
The CST is expected to reveal a more pro-growth agenda compared to last year, with approximate targets of 5 percent for GDP growth, 4 percent of GDP for the fiscal deficit ratio, and 2 percent for consumer inflation. Hopefully, further stimulus will come from roughly 3 trillion yuan in ultra-long special treasury bonds and 4.5-5 trillion yuan in local government special-purpose bonds.
Furthermore, measures to boost consumer spending and encourage private-sector innovation will also be introduced. Sweeping structural reforms will remain improbable as the government remains committed to Xi’s vision of high-tech industrial self-reliance.
It is predicted that this year CST will further boost the private sector through deepening structural reforms, business, investment and financial incentives. More focus will be on qualitative industrial growth in which EVs, lithium batteries/energy storage equipment, green technologies and artificial intelligence. It is hoped that more sectors of the Chinese economy will be opened for attracting more and more inflows of the FDIs.
A key focus of the Two Sessions will be the Government Work Report (GWR), which Premier Li Qiang will present to the NPC on behalf of the State Council on March 5. The report will review the government’s work in 2024, outline economic priorities for 2025, and set major policy tasks for the year ahead. Headlines will center on annual targets for growth, deficits, and inflation.
It is estimated that the Chinese policy makers will also announce annual targets for new urban jobs and the urban unemployment rate. Last year, it set these targets at 12 million new jobs and 5.5 percent unemployment, and this year’s figures will likely be similar.
It is anticipated that the Chinese President Xi Jinping will reaffirm his commitment to the concept of high-quality development through prioritizing central guidance, industrial capacity, technological self-reliance, environmental protection, and last but not least, people’s welfare over rapid growth and market forces. Xi will also maintain his strong commitments to further investment in the high-tech new productive forces.
It seems that sincere and coordinated efforts should be announced and implemented to stabilize the housing market and increase social spending on pensions, healthcare, and child-rearing will provide some relief to households, by announcing financial stimulus for the development of enterprises and local governments.
I forecast that the upcoming CTS will announce various holistic and comprehensive economic policies and deepening of structural reforms to support Xi’s longer-term economic strategy including decentralizing fiscal responsibilities, strengthening the tax system, and removing internal market barriers.
Interestingly, the policy makers of China and the CEWC have outlined seven priority areas for boosting consumption in 2025, indicating policy support from the state including positioning China as a hub for product launches, winter tourism, e-commerce, artificial intelligence and the silver economy.
It is submitted that the Chinese policy makers may announce policies pertaining to recalibrating platform economy regulations, boosting consumption demand, stimulating economic activity in smaller cities, integrating the Greater Bay Area, and expanding investment in maritime industries.
I propose that the Chinese policy makers should consider replacing the real estate sector with research, innovation, commercialization, manufacturing, and digitalization as new economic growth drivers which will be useful for productivity gains helping mitigate issues related to debt, demographics, and dependence on the West.
I notice that Trump’s high tariffs would be a X-Factor during the CTS due to which the GWR must integrate resolving domestic economic problems with responding to external challenges through motivation, and digitalization providing impetus to macro-economy. Hopefully, the launch of the DeepSeek will also be appreciated as being the new strategic window for AI development by leveraging China’s vast market demand, deep supply chains, and diverse application scenarios.
Interestingly, Xi’s private enterprise symposium successfully generated widespread attention, reinforcing the prospect of a more business-friendly environment in Beijing. The CTS will try to restore confidence in its private sector.
Hopefully the private sector will be encouraged to make investments in the high tech sector of the economy making it a supply-chain resilient.
Thus the Chinese private companies should rigorously work for the country aligning with national policies and support government priorities.
It seems that the upcoming CTS will further prompt policies to attract foreign investors. Thus greater opening and modernization will be announced for the international investors in which the Foreign Investment Stabilization Action Plan will play an important role.
Moreover, to attract more and more inflows of the FDIs, the policy makers of China should change their approach moving away from tax breaks and subsidies toward sector-specific liberalization, regulatory streamlining, and reinvestment incentives ensuring new expanded access to value-added telecommunications services, wholly foreign-owned hospitals, and streamlined drug approvals, aligning FDI more closely with government priorities. It is predicted that the Chinese policy makers may announce to retain FDI through eased restrictions on mergers and acquisitions and improved access to domestic financing channels.
So far, Trump’s disruption of traditional U.S. diplomacy has enabled China to position itself as a defender of the global economy and international order, a dynamic that seemingly serves China’s geopolitical and geo-strategic interests.
It is submitted that the Chinese policy makers should also further strengthen its three-pronged industrial policy of “upgrading traditional industries, expanding emerging industries, and cultivating future industries.
Last but not least, the Chinese president Xi may also elaborate about the composition, utility and targets of the 15th Five-Year Plan, which will define China’s economic and social development priorities for 2026–2030. The plan is scheduled for release at the Two Sessions in March 2026, and Xi is expected to convene a Fourth Plenum of the Party’s Central Committee later this year to provide high-level guidance on its content.
In summary, the Chinese Two Sessions (CTS) have become a global economic stimulator, facilitator and barometer for their global economy. Obviously, it has become a beacon of hope for the Global South and developing countries to jointly work for achieving the desired goals of socio-economic prosperity and sustainability.
It is estimated that stronger fiscal stimulus, calling for a “more proactive fiscal policy” and an enhancement of “extraordinary counter-cyclical adjustments will be announced. The policy makers will pledge to increase the fiscal deficit ratio” and prioritize “vigorously boosting consumption, improving investment efficiency, and expanding all-round domestic demand.
China will likely maintain a GDP growth target of “around 5 percent for the third consecutive year. Provincial governments, which present work reports to local parliamentary gatherings ahead of the Two Sessions, have set growth targets with a weighted average of 5.1 percent.
Moreover, meaningful measures will be announced for stimulating property market correction, consumer sentiment, and strained local finances. It is suggested that Beijing should expand fiscal stimulus, lower bank reserve requirements, and cut interest rates. The more U.S.-China trade and technology tensions escalate, the more aggressively Beijing may implement stimulus measures.
Many official reports indicate that the Chinese policy makers will set a record high fiscal deficit ratio target of 4 percent of GDP implying an additional 1.3 trillion yuan in spending within the general budget.
The author suggests that Beijing should also raise more off-budget funds through ultra-long special treasury bonds, first introduced last year with a 1-trillion-yuan issuance, and local government special-purpose bonds, which had a target issuance of 3.9 trillion yuan in 2024.
Hopefully, during the upcoming CTS the policy makers will focus on massive green transformation, robotic economy, quantum technologies and last but not least space economy making and transforming the Chinese economy beyond space towards greater progress and prosperity.
China being the second largest economy of the world championing in renewables, manufacturing, supply chains, green transformation, disaster management, global governance has a unique role in economic globalization, international cooperation and digitalization thus the upcoming CTS would remove all misperceptions about its economy, industry, political system and social priorities highlighting the strategic priorities based on the Xi’s global shared prosperity, development, security and civilizational initiatives.
Last but not least, China is expected to lower its consumer inflation target ceiling from 3 percent to around 2 percent. Deflationary pressures persist as the ongoing property correction continues to erode household wealth and suppress consumer spending. Every provincial-level government has set a 2 percent inflation target. If applied nationally, this would mark the lowest target since the early 2000s and the first time in over two decades that the figure falls below 3 percent. ( This article reflects author’s opinion and not necessarily the views of  WNAM )