By Mehmet Enes Başer, independent researcher
In March 2025, China convened its annual “Two Sessions,” comprising the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC). These gatherings are pivotal in setting the nation’s policy direction for the coming year, addressing economic strategies, technological advancements, defense policies, and foreign relations. The outcomes of these sessions offer valuable insights into China’s priorities and their potential global impact.
Economic Outlook: Navigating Global Challenges
China has set a GDP growth target of approximately 5% for 2025, reflecting cautious optimism amid global economic uncertainties and escalating trade tensions, particularly with the United States. This target aligns with China’s long-term goal of doubling the economy’s size by 2035. To achieve this, the government plans to increase its fiscal deficit to 4%, amounting to over RMB 5.5 trillion, and allocate an additional RMB 4.5 trillion in special local government bonds for infrastructure development and industrial modernization. These measures aim to stimulate domestic demand and counter external economic pressures.
Technological Self-Reliance: Embracing Innovation
Amid heightened technological competition and export restrictions from Western nations, China is accelerating investments in advanced manufacturing, artificial intelligence, and quantum computing. The government has introduced incentives such as tax breaks, subsidies, and state-backed funding to bolster these sectors, aiming to reduce dependence on foreign technology and establish a resilient industrial ecosystem. This strategic focus underscores China’s commitment to achieving technological self-reliance and securing a leading position in global innovation.
Social Policies: Addressing Demographic and Employment Challenges
In response to demographic shifts and economic restructuring, China has pledged to create over 12 million new urban jobs, maintaining the unemployment rate around 5.5%. The government is expanding healthcare funding, raising per capita medical insurance subsidies, and enhancing public health services to adapt to an aging population and ensure social stability. These measures reflect a proactive approach to sustaining economic growth while addressing the social implications of demographic changes.
Defense and Foreign Policy: Navigating Geopolitical Tensions
China has announced a 7.2% increase in defense spending for 2025, reflecting its commitment to modernizing the People’s Liberation Army (PLA) and enhancing its capabilities. This move comes amid escalating tensions in the South China Sea, the Taiwan Strait, and a growing strategic rivalry with the United States. China’s defense policy emphasizes safeguarding national sovereignty and regional stability, aligning with its broader strategic objectives.
In foreign policy, China continues to position itself as a stabilizing force in global affairs, contrasting its governance model with perceived Western instability. The government has criticized U.S. policies, particularly recent tariff increases, and emphasized strengthening partnerships with developing nations to counter U.S. influence. This approach reflects China’s ambition to reshape global governance structures and expand its geopolitical influence.
Environmental Commitments: Balancing Growth and Sustainability
China’s environmental agenda during the Two Sessions focused on balancing economic growth with sustainability. The government reiterated commitments to reducing carbon emissions and investing in renewable energy sources. However, the continued development of coal as a “supporting role” in the energy mix indicates the complexities in transitioning to a low-carbon economy. China’s approach highlights the challenges of aligning environmental goals with immediate economic and energy security needs.
Global Implications: Shifting Economic and Strategic Landscapes
The policies and priorities outlined during China’s Two Sessions have significant global implications:
- Economic Influence: China’s focus on technological self-reliance and industrial modernization may lead to shifts in global supply chains, affecting multinational corporations and international trade dynamics.
- Geopolitical Dynamics: Increased defense spending and assertive foreign policies could heighten geopolitical tensions, particularly in the Asia-Pacific region, influencing global security architectures.
- Environmental Impact: China’s environmental policies will play a crucial role in global climate change efforts, given its status as the world’s largest carbon emitter.
Conclusion
China’s Two Sessions 2025 have delineated a comprehensive strategy to navigate domestic challenges and assert its position on the global stage. The emphasis on economic stability, technological innovation, social welfare, defense modernization, and environmental sustainability reflects a multifaceted approach to national development. As China implements these policies, the global community will closely monitor their outcomes, given their far-reaching implications for international economic trends, geopolitical relations, and environmental initiatives.