Tomorrow, the most important political event of the year begins in Beijing: The "Two Sessions" (Lianghui).
Analysts expect a historic premiere: For the first time in three years, Beijing is likely to lower its GDP target – from "around 5%" to a range of 4.5-5%.
The new realism
21 of 31 Chinese provinces have already lowered their growth targets. The signal from the regions is clear: The era of double-digit growth rates is definitively over.
Flexibility: Range target provides room for reforms instead of pure growth chasing
Demographics: Aging population makes high targets unrealistic
Geopolitics: Iran conflict and US trade war increase uncertainty
15th Five-Year Plan: tech instead of consumption
The Two Sessions mark the start of China's new blueprint (2026-2030). Central is the promotion of "New Quality Productive Forces":
Technological sovereignty: Massive investments in AI, quantum computing, semiconductors, and 6G are intended to make China independent of Western export controls.
Industrial upgrading: Instead of cheap mass goods, the focus is on producing high-end equipment and new materials.
Problem zone consumption: It remains to be seen whether Beijing will provide real fiscal resources for households or continue to primarily subsidize the supply side (industry).
Trump factor
US President Donald Trump is expected in Beijing at the end of March. Experts therefore expect moderate diplomatic rhetoric to avoid jeopardizing the negotiating basis for tariffs.
Sources: CNA, Wall Street Journal, Straits Times
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