The two sessions in 2025: the end of a Chinese five-year cycle.

By Renato Peneluppi Jr. (*) - In early March 2025, China held the "Two Sessions" (两会), an annual event marking the country's legislative cycle. The term refers to the meetings of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC), which take place simultaneously. These meetings are essential for the nation's political and strategic planning.

This is the moment when the government presents and deliberates on long-term plans for the current year, or adjustments taking into account the previous year's report, considering how to achieve broader plans in essential areas such as the economy, defense, trade, diplomacy, and the environment, reflecting national priorities within the policy of "people's democracy throughout the entire process" (全过程人民民主).

The “Two Sessions” are essential for monitoring and adjusting the Five-Year Plan, ensuring that its guidelines adapt to the country's needs year after year. The National Policy Agency (APN) evaluates the plan's implementation, approves adjustments, and defines new goals, while the National Commission for Political and Cultural Policy (CCPPCh) contributes with analyses and recommendations. This process ensures that the country's development proceeds strategically and in line with current challenges.

The Communist Party of China (CPC) follows a structure organized in strict cycles, reflecting its model of democratic centralism. Since the Cultural Revolution, the Five-Year Plans—the main tool of state planning—have been drawn up in years ending in 1 or 6. The Party Congress, responsible for electing the leadership, takes place in years ending in 2 or 7. These events alternate precisely, ensuring continuity and strategic control in the country's development.

This year's sessions are especially important as they mark the final "Two Sessions" of the 14th Five-Year Plan and will serve as the basis for the 15th Five-Year Plan, to be presented in 2026. The decisions made in this year's sessions will have a profound impact on China's economic and strategic future. To better understand this, it is necessary to highlight two interesting characteristics of the 14th Five-Year Plan: First, it overlaps with the second half of the ten-year plan called "Made in China 2025," playing an important role in the completion of this plan.

The second component is the “Long-Term Development Goal to 2035,” a fifteen-year plan aimed at consolidating China’s sustainable growth. Its first five years coincide with the second half and completion of “Made in China 2025” and are anchored in the 14th Five-Year Plan, both having been initiated together, ensuring strategic continuity. The completion of these initiatives will position China halfway to its second centennial goal in 2049 – the New Era. From 2035 onwards, fifteen years will remain to realize the Chinese Dream of national rejuvenation.

Annual work report

The annual work report, presented by Premier Li Qiang at the opening of the National People's Congress (NPC), confirmed the achievement of the 2024 "Two Sessions" targets, in which the Chinese government projected GDP growth of approximately 5%. By the end of the year, the economy had reached that goal.

Registering a GDP of 134,91 trillion yuan (approximately US$17,8 trillion). Although the growth rate is no longer central to this new phase of development, this was the slowest growth rate since 1990, yet the absolute volume of GDP is the highest ever recorded in the country's history.

Of particular note is the fact that they achieved an urbanization rate of 67%, with an urban unemployment rate of 5,1%, and a national energy matrix with approximately 40% renewable energy. High-tech manufacturing increased by 8,9%, and the production of new energy vehicles exceeded 13 million units. The country also contributed about 30% to global economic growth, maintaining more than US$3,2 trillion in foreign exchange reserves.

The digital economy still represents less than 10% of GDP, indicating room for growth, especially given the government's ambitions to strengthen the technology sector. The added value of IT services, reaching 10,9%, shows progress in digitalization and innovation. These figures suggest that, although the technology sector is expanding, it does not yet dominate the economy, aligning with the Chinese strategy of balancing digital modernization with traditional and manufacturing sectors.

According to Xiaohuan Lan, author of the book How China Works: An Introduction to China's State-led Economic Development, this transformation is highlighted by his statement: "China is moving towards an economic model that prioritizes innovation and knowledge, gradually abandoning the exclusive focus on manufacturing."

Goals for 2025

The government's work report also presented economic and social goals for the current year, maintaining GDP growth at 5%, and the creation of 12 million urban jobs, with a target of a 5,5% urban unemployment rate. In his opening remarks, the Prime Minister highlighted the implementation of policies and subsidies to increase the birth rate and address China's demographic issues.

The Chinese government will adopt measures to boost consumption, strengthen returns on investment, and expand domestic demand. Specific initiatives are planned to increase purchasing power, expand the supply of quality products and services, and improve the consumer environment by exploring the potential for diversified spending and promoting its modernization.

To stimulate the economy, efforts will be made to raise personal income through various means. In addition, long-term National Treasury bonds worth 300 billion yuan will be issued for consumer goods modernization programs. The government will also conduct an evaluation of the poverty eradication policy to verify its effectiveness. New productive forces will serve as a new engine to promote high-quality development and advance Chinese modernization, as well as a new driving force propelling global economic growth.

One of the main focuses will be the growth target for 2025, demonstrating China's ability to maintain its resilient economy in the face of global challenges, such as potential new tariffs from Donald Trump. This scenario reinforces the country's economic transition strategy, with investments in technology, digitalization of industry, and strengthening of domestic consumption, aligning with the Common Prosperity policy, which seeks more balanced and inclusive growth.

China's investment in R&D (Research and Development) reached 3,61 trillion yuan (US$503,21 billion), solidifying the country as the second-largest investor in this sector worldwide. The government reaffirmed its commitment to technological innovation, announcing a 1 trillion yuan national innovation investment fund to boost advancements in strategic areas.

With this investment, China seeks to strengthen cutting-edge sectors, create new high-quality productive forces, and boost high-quality economic and social development, consolidating its position as a global leader in innovation.

The two sessions for the world

During the Two Sessions of 2025, in one of the traditional and important moments, China's top diplomat, Wang Yi, gave an interview outlining the main aspects of the country's foreign policy. He criticized US tariffs as detrimental to global stability, emphasized China's role as a "stabilizing force," and reaffirmed its commitment to multilateralism.

Wang Yi also highlighted China's strong partnership with Russia and advocated for political negotiations in conflict zones, particularly in Ukraine and the Middle East. His statements reinforced China's diplomatic position amid global uncertainties.

As a "stabilizing force," China, in order to consolidate its strategic self-sufficiency and project itself as a global power by 2049, will need clear goals and decisive strategies to ensure stability. Innovation becomes the central engine of this development, reducing external vulnerabilities and driving more resilient and sustainable growth.

Given the crucial need to fully implement the new development concept and accelerate the construction of a new economic model, China has redefined itself in the world. As Kishore Mahbubani highlights in Has China Won?, “China’s remarkable transformation is the result of pragmatic governance, long-term planning, and a deep commitment to modernization in its own way.”

Instead of following Western models, China has forged its own path, combining innovation, strategy, and a forward-thinking vision. Its progress is not only economic but also technological and social, driven by a unique approach to developing common prosperity. The impact of this modernization is only beginning to shape the 21st century—and the world must prepare for a future in which China will be a central player in building the new global order.

(*) PhD in Chinese Public Administration. Article originally published by the Perseu Abramo Foundation.