The nation’s political elites and lawmakers are gathering next week for the Chinese People’s Political Consultative Conference followed by the National People’s Congress, with the events beginning next Tuesday and Wednesday respectively.
The annual double-header known as the “two sessions” is expected to set the policy agenda for regaining economic growth while navigating the country’s response to the evolving trade and tech wars being waged by the US. Proceedings tend to last around a week.
The country’s official growth target for 2025 will be announced following the sessions. Dutch multinational bank ING has predicted this will be set at around 5 percent – the same as it was last year – in “a show of confidence that external headwinds might not derail growth in Asia’s biggest economy.”
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The bank noted that a reduction, even “above 4.5 percent,” would “be read as a sign that growth will come under greater pressure this year” and likely be poorly received by markets.
“We expect the two sessions will prioritise increased fiscal spending, a higher debt ceiling (set at 35.5 trillion yuan in 2024), higher levels of special government bond issuance, and telegraphing Beijing’s strategy to support domestic demand,” ING said.
US broadcaster CNBC predicted that details of further fiscal stimulus would emerge from the upcoming sessions, and that Beijing would revise its annual consumer price inflation target down to around 2 percent, which would be its lowest in more than two decades. The figure would act more as a ceiling than target, as consumer prices in the mainland grew by just 0.2 percent between 2023 and 2024.
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Details could also be revealed regarding the draft of a new law supporting non-state-owned businesses, currently being reviewed by authorities. Bruce Pang, adjunct associate professor at the Chinese University of Hong Kong business school, told CNBC that he expected the introduction of new measures focused on increasing investment opportunities for private enterprises and helping small-tech companies obtain financing more easily.
The sessions follow last week’s symposium between President Xi Jinping and the country’s elite tech entrepreneurs; a sign Beijing could be softening its stance on the private sector as competition between it and Washington intensifies.
According to Chim Lee, senior analyst at the Economist Intelligence Unit, the symposium showed that “the state is willing to show regulatory leniency to technology firms, sparing them major crackdowns, in exchange for their investment in innovations in critical technologies.”
Other expected announcements to come out of the two sessions could be around China’s 2025 spending plans for defence and technological development, along with strategies to boost domestic consumption.
