China’s National People’s Congress: Policy Directions Amid Economic Challenges

China's National People's Congress (NPC) convenes this week in Beijing, where it will outline the country's policy direction and economic goals for the next five years. This gathering, alongside the Chinese People’s Political Consultative Conference, is known as the Two Sessions. The NPC, comprising nearly 3,000 members, is expected to ratify new laws and announce the government's GDP targets, with a focus on the 15th five-year plan aimed at enhancing technological self-sufficiency and innovation.

China to unveil priorities for coming 5 years at major annual political meetingChina's economic ambitions hit limits to growth as its national congress meets

China's economy is currently facing significant challenges, including sluggish growth, high youth unemployment, and a downturn in the housing sector. The housing market has seen home prices decline by over 20% since 2021, leading to widespread defaults among property developers and the elimination of hundreds of thousands of jobs. With 12.7 million graduates entering the job market this year, youth unemployment has surged to over 16%. This economic backdrop complicates the NPC's agenda, as leaders must balance ambitions for technological advancement with the pressing need to stimulate domestic consumption.

China's economic ambitions hit limits to growth as its national congress meets

During the NPC, observers anticipate a shift in focus from high-speed growth to "high-quality growth," which may involve lowering the headline growth target to a record low. Experts suggest that the government will need to prioritize social welfare measures to support the population amid rising economic pressures. The emphasis on high-tech industries, such as artificial intelligence and renewable energy, continues, but there are concerns that these sectors may draw resources away from traditional industries that provide the majority of jobs.

China's economic ambitions hit limits to growth as its national congress meets

Policy experts, including Neil Thomas and Lobsang Tsering from the Asia Society, note that the NPC's decisions will reflect a significant shift in economic strategy. They emphasize that the leadership under Xi Jinping has consolidated power, which may influence the direction of policy and governance. The NPC's proceedings are largely scripted, with decisions made prior to the sessions, reinforcing the party's unity and Xi's central role.

China to unveil priorities for coming 5 years at major annual political meeting

Critics argue that the NPC's focus on high-tech development may exacerbate existing economic disparities. Henry Gao, a professor at Singapore Management University, warns that successful future industries could detract from traditional sectors that sustain most livelihoods. Additionally, the NPC's ceremonial nature raises questions about the effectiveness of its deliberations, as many decisions are pre-determined by party leaders.

China's economic ambitions hit limits to growth as its national congress meets

There are discrepancies regarding the effectiveness of China's economic policies, with some economists questioning the reliability of official growth figures. While China reported approximately 5% growth in 2025, analysts express skepticism about the sustainability of this growth, particularly in light of structural economic issues and the ongoing trade war with the United States.

China's economic ambitions hit limits to growth as its national congress meets

• “What we’ll see is the trade-off between whether it’s going to be industry and tech, or looking after domestic demand,” — Alexander Davey, Analyst at the Mercator Institute for China Studies

China's economic ambitions hit limits to growth as its national congress meets

• “If anything, the more successful the so-called future industries become, the more they will draw resources away from the traditional sectors that still provide the bulk of employment and livelihoods for most people,” — Henry Gao, Professor of Law at Singapore Management University

China's economic ambitions hit limits to growth as its national congress meets

• “The anti-corruption drives have eradicated potential political rivals, and his iron grasp on power makes it much less likely other officials will challenge his vision to build China into a self-sufficient tech leader and 21st-century global power.” — Center for Strategic and International Studies report

China's economic ambitions hit limits to growth as its national congress meets

As the NPC unfolds, the implications of its decisions will be closely monitored, particularly regarding their impact on China's economic trajectory and social stability.

China to unveil priorities for coming 5 years at major annual political meeting