Two Sessions, one theme: Chinese policymakers double down on continuity as Sino-US tensions mount

BEIJING: Championing stability and order in a troubled world, while signalling a willingness to open up globally as other countries like the US retreat - that’s the key message China sought to deliver at its most important political meetings of the year, analysts say.

At the Two Sessions, which conclude on Tuesday (Mar 11), Chinese policymakers also wanted to paint a picture of a resilient economy that will only grow stronger despite mounting external pressures and domestic challenges, observers note.

Doubling down on policy continuity, top Chinese leaders and delegates alike sought to project an image of stability and unity, said Alexander Vuving, a professor at the Daniel K Inouye Asia-Pacific Center for Security Studies in Honolulu.

"As the Book of Changes (Yi Jing) advises, you must ‘use the constant to deal with the ever-changing’. It appears that China is following this ancient dictum," he told CNA, referring to the ancient Chinese divination text.

Known as “lianghui” in Chinese, the Two Sessions refer to the near-concurrent meetings of China’s top political advisory body, the Chinese People’s Political Consultative Conference (CPPCC), and the national legislature, the National People’s Congress (NPC).

Here are the key takeaways from the political gatherings.

BANKING BIG ON CONSUMPTION AND INNOVATION

Boosting domestic consumption topped the agenda as widely expected.

Premier Li Qiang stated as much while delivering his work report at the opening of the NPC on Mar 5, where he set out China's 2025 economic growth goal of around 5 per cent.

Calling for the pursuit of “people-oriented macro policies”, Li said the government would place “a stronger economic policy focus on improving living standards and boosting consumer spending”.

He also detailed measures - such as enhancing household incomes, easing credit constraints, and stimulating diversified consumption. 

Chinese policymakers have been increasingly looking to their own citizens to uplift the economy and shift away from a longstanding export and investment-led growth model, but stoking the fires of domestic demand has proven challenging.

Senior economist Xu Tianchen of the Economist Intelligence Unit (EIU) observed that officials this time round “are frank about the problems” and “acted on them proactively”, citing examples such as weak domestic demand and the birth crisis.

“This marks a shift from past practice where some problems were neglected, or were acknowledged but left unresolved.”

On a broader scale, authorities pledged robust fiscal stimulus, declaring that a “more proactive fiscal policy” would be adopted.

Authorities also reaffirmed their commitment to carving out a more level playing field for the economically vital private sector - a refrain already signalled through a rare private sector symposium attended by President Xi Jinping.

Underpinning all these efforts was the conviction that embracing high-tech innovations such as artificial intelligence (AI) and quantum technology is key to driving national development. China has described this as a push for “new productive forces” or “xin zhi sheng chan li” in Chinese.

A key point made at this year’s Two Sessions is that “technology created by Chinese for Chinese is the best form of security”, Kerry Brown, a professor of Chinese studies and director of the Lau China Institute at King's College London, told CNA.

“(Technology is) going to be regarded as the single thing that tries to solve the low growth problems, environmental problems and unemployment for the young … it's also going to be the key thing to help China in dealing with the United States and its attempts to use trade as a form of pressure on China.”

LIFTING LIVELIHOODS

Alongside the commitments to economic reforms, the Two Sessions placed significant emphasis on enhancing livelihoods.

Officials outlined measures to tackle pressing issues such as housing affordability and employment stability, in order to fortify the social safety net.

On the housing front, unveiled initiatives to ease the financial burden include increased subsidies for affordable housing and reforms designed to lower property transaction costs.

As for employment, initiatives to stimulate job creation and bolster career stability were introduced, such as offering people more avenues to start their own businesses and rolling out large-scale plans to upgrade their vocational skills.

China’s youths have borne the brunt of a slowing economy. The unemployment rate among young people aged 16 to 24 declined to 15.7 per cent in December last year, after peaking at 18.8 per cent in August due to a surge of fresh graduates, according to official data.

With over 12 million university graduates expected this year, the gap between jobseekers’ expectations and available opportunities continues to widen.

“Economic issues over the past years did pose challenges to livelihoods and, at some stage, risked a deterioration in social stability. It looks like the state, alarmed by these threats, is becoming more responsive in terms of tackling them,” said EIU’s Xu.

On the demographic front, officials highlighted how people in China are living longer as proof that public health improvements are reaping results, while also highlighting the pressures of an ageing population.

Authorities underlined a broader strategy to enhance overall living standards by strengthening support systems in healthcare, pensions, and public services.

For instance, the minimum monthly pension has been raised by 20 yuan (US$2.75) to 143 yuan, while an extra 30 yuan per person has been added to medical insurance subsidies. Subsidies for basic healthcare services have been increased by 5 yuan.

While modest, such steps are necessary, noted Huang Tianlei, a research fellow and China programme coordinator at the Peterson Institute for International Economics.

“(This is) an example of the kind of policy measures needed to improve livelihood and raise household consumption structurally,” he said, while adding that more structural measures will be required to sustain long-term improvements.

FORTIFYING DEFENCE SPENDING

The annual Two Sessions are also closely watched for the announcement of China’s defence budget - seen as a measure of how Beijing will expand its military capabilities.

This year’s reveal took place as China faces brewing tensions in the South China Sea and Taiwan Strait, along with a growing Sino-US rivalry.

In the end, a 7.2 per cent increase for 2025 was unveiled - matching last year’s growth and marking the 10th consecutive year of single-digit growth. The headline figure was some 1.78 trillion yuan.

When delivering his work report, Premier Li underscored plans to accelerate defence-related projects, deepen military-civilian integration, and enhance the framework for defence science, technology, and industries.

Analysts view China’s steadily growing military expenditure as a strategic commitment to deterrence and military renewal, rather than a reaction to immediate geopolitical pressures.

China’s reveal of its military spending pot comes at a “strategically critical” moment, as competition with the United States escalates under the Trump administration and security threats grow more complex, Brown from King’s College London previously told CNA.

“China is defensive at the best of times, and now even more so because of the heightened insecurity that it probably feels from its environment and from America, which is very hard to predict.”

Beijing has consistently pointed out that its defence budget remains significantly lower than Washington’s, while also noting that it has remained below 1.5 per cent of GDP for some years now, below the global average.

SUBTLE AND DIRECT MESSAGES TO THE US

The Two Sessions yielded insights into China’s thinking on foreign affairs while also providing hints on Beijing’s intended global messaging.

In a 90-minute news conference on the sidelines, the country’s top diplomat Wang Yi made the case for major powers to be globally responsible.

If large nations adopt a “might is right” approach, it would severely undermine the international order and allow the law of the jungle to reign once more, warned Wang in a subtle critique of the US, which has been trotting out expansionist rhetoric under President Donald Trump.

“Major powers, in particular, should lead by example in upholding integrity and the rule of law, opposing double standards and selective application, and should never engage in bullying, market manipulation, or plunder,” said Wang, who is China’s top diplomat by virtue of his concurrent position as head of the Central Foreign Affairs Commission of China’s Communist Party.

Wang’s pitch was carefully crafted to win over countries by portraying itself as a benign, international player, as opposed to an increasingly unilateral Washington that has been pulling out of international outfits and agreements, analysts have said.

Observers further noted that his remarks were likely spurred by Washington's increasingly hardline stance on Ukraine - such as a suspension of military aid and intelligence sharing - and its growing alignment with Russia.

During the press conference that also touched on topics like Taiwan, the South China Sea and the Global South, Wang hit out directly at the US for not behaving as a major power in their worsening trade war.

“The United States should not repay kindness with resentment, nor should it impose tariffs without reason. This is not the behaviour of a responsible major power,” he said.

The US has imposed a cumulative 20 per cent tariff on all Chinese goods, citing Beijing’s alleged inaction over fentanyl flows. China has hit back with retaliatory duties, of which the latest - targeting American farm products - took effect on Monday. 

MAINTAINING DOMESTIC STABILITY

At the same time, policymakers saw that efforts to ensure stability at home continued apace - intensifying efforts to combat crime, corruption, and threats to public order.

Telecom scams - with Chinese nationals among the perpetrators and victims - ranked among the top concerns, as laid out in the work reports by China’s top prosecutorial and judicial bodies, the Supreme People’s Procuratorate (SPP) and the Supreme People’s Court (SPC).

Chinese courts handled approximately 40,000 cases of telecom and online fraud in 2024, a sharp 26.7 per cent rise from the previous year.

Authorities have ramped up efforts to dismantle cross-border criminal networks, particularly those operating out of Myanmar. According to the SPC, these cases involved 82,000 defendants.

Meanwhile, the SPP reported charging 78,000 individuals, marking a 53.9 per cent surge in prosecutions.

At the same time, China’s courts reinforced penalties for crimes that disrupt social stability.

In 2024, courts handled 49,000 cases of serious violent crimes involving 58,000 defendants, including homicides - a 5.8 per cent decrease from the previous year.

The SPC referenced recent high-profile attacks, such as the deliberate car-ramming outside a sports stadium in Zhuhai, where a 62-year-old man killed 35 people. The perpetrator was executed in January.

Corruption remains a key focus, with both the SPP and SPC underscoring intensified anti-graft efforts.

In 2024, courts concluded 30,000 cases of embezzlement, bribery, and other corruption-related offences involving 33,000 individuals - a 22.3 per cent increase from 2023.

China has for years sustained a far-reaching anti-graft campaign. In January, its top anti-corruption agency identified areas such as finance, energy and state-owned enterprises as among the focus points.