Two Sessions 2026: Beijing's ambitions and weaknesses today
Behind the lowest GDP target since 1991 lies the recognition that the growth model on which China built its rise has lost most of its momentum. Technology is replacing real estate as the driving sector. Behind the new Five-Year Plan lies a geopolitical map, with military spending still growing by 7 per cent. Xi Jinping's purges have left many empty seats among the delegates.
Milan (AsiaNews) – The Two Sessions, as the parallel assemblies of the National People's Congress and the Chinese People's Political Consultative Conference are commonly called, are held every spring in Beijing and represent the most important political event in the Chinese calendar. The two bodies perform functions that partly pertain to a parliament.
Opening this year, yesterday and today respectively, and scheduled to conclude next Wednesday, they bring together more than three thousand delegates from every corner of the country, whose role is to approve laws and economic objectives. The substance of the decisions has already been finalised elsewhere, but the event offers concrete signs about the regime's priorities.
This year's edition is particularly intense. The sessions are called to ratify the 15th Five-Year Plan for 2026-2030, in an international context marked by the US attacks on Iran, trade tensions with the United States, and Trump's planned visit to Beijing in a month, while purges continue to reshape the military leadership.
With respect to the economy, the most anticipated signal came today with Premier Li Qiang's annual report, with the GDP growth target set at 4.5 to 5 per cent, the lowest since 1991 and the first reduction since 2023, after three consecutive years in which Beijing had aimed for “around 5 per cent”.
This figure should not be interpreted as a sign of a full-blown crisis, but rather as the acknowledgement that the growth model on which China built its rise over the past decades has largely lost its momentum. The 2 per cent inflation target – the same as last year’s, which was largely missed – is symptomatic of the situation.
Technology instead of bricks and mortars
The structural issue that has dragged on for years is how to replace the property market, which has long been the main driver of investment and wealth for Chinese families, but is now in deep crisis.
The answer that clearly emerges from the general outline of the Five-Year Plan is a focus on technology as the new backbone of the economy, with artificial intelligence, semiconductors, and robotics as leading sectors.
Beijing intends to channel significant resources into these industries through a top-down mix of state and private capital, essentially replacing a real estate bubble with a sector equally dependent on state direction and whose market outlets are uncertain, given, among other things, Western restrictions on the export of advanced technologies.
Added to this is the unresolved issue of domestic demand. Chinese families save heavily because the lack of a solid social safety net in healthcare and social security pushes them to set aside resources for the future. Persistent deflation, with consumer prices virtually stagnant and producer prices declining, is the most visible consequence.
The government appears unwilling to address this issue through a structural expansion of welfare, preferring instead to implement other measures.
The report on labour allocated 350 billion yuan (almost US$ 51 billion) for vouchers and incentives for the purchase of durable goods, a figure lower than the previous year. These instruments may have some short-term impact, but are unlikely to alter families' long-term expectations. Li has also promised wage increases, but has not provided any details.
The five-year plan as a geopolitical map
Beyond the annual goals, the distinguishing feature of this year's Two Sessions is that the new Five-Year Plan has a clear geopolitical connotation. The underlying theme is reducing foreign dependence in strategic sectors such as technology, raw materials, and infrastructure.
The Iranian crisis is seen in Beijing as concrete confirmation of the dangers of dependence on adversaries, a risk the regime does not intend to take.
In the recommendations already approved in the plan, the fusion of industrial development and military capability makes a comeback with greater emphasis than in previous years, when it had been toned down to avoid raising concerns among China’s Western trading partners.
The document also commits China to "significantly increase" the share of consumption in GDP, but without setting any binding targets and simply using language virtually identical to that of the previous plan. This is such a vague indication that it casts doubt on the actual desire to change course.
It is in this climate that the issue of purges arises, which the opening ceremony makes impossible to ignore. Today, 2,765 delegates were present, the lowest number since the start of this century, with 113 absent, double the historical average recorded during Xi's reign.
Numerous military and civilian delegates were formally removed from both assemblies. The purges at the top of the People's Liberation Army, which have been going on for over two years, reached an unprecedented level in the recent history of the People's Republic, with 185 high-ranking officers affected.
This weighs on the ambitions declared in the Five-Year Plan, which insistently focuses on military modernisation and force projection capabilities, while the military command is decimated by investigations and dismissals. Yet, the military budget is expected to grow by 7 per cent, a very slight decrease from last year's 7.2 per cent, but still well above the GDP growth target.
The regime's implicit response is that political loyalty comes before operational efficiency. This year's Two Sessions are, in this sense, a mirror of the system that produces them: huge external ambitions and enormous internal weaknesses.
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06/03/2021 12:54
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