CNA Explains: What China’s Two Sessions mean for the world

BEIJING: China’s capital is getting ready to once again host thousands of delegates from across the country, for what are its biggest political meetings every year.

Amid heightened security and a drone ban in place, the gatherings - known as the Two Sessions - will see not just top national leaders in attendance, but also A-listers from the private sector and even sports and entertainment circles.

The meetings, known as lianghui in Mandarin, give an important clue to the policy agenda for the world’s second largest economy.

This year, the backdrop is a renewed trade war with the United States and continued domestic headwinds.

What exactly are the Two Sessions?

It's the annual meeting of two key Chinese institutions: The top political advisory body - the Chinese People’s Political Consultative Conference (CPPCC) - and top legislature - the National People’s Congress (NPC).

The CPPCC typically meets first. This year, it will open proceedings on Tuesday (Mar 4), with the NPC gathering the next day. 

While both meetings then run at roughly the same time, they are still largely separate events.

Hence, the name "Two Sessions".

What do the CPPCC and NPC do? 

The main job of the CPPCC is to offer recommendations on a wide range of issues, from economy to education. It usually puts out thousands of proposals, some of which have gone viral in the past. These include suggestions for compulsory romance lessons and regulations for escape rooms.

The body has more than 2,000 members who're meant to represent different parts of Chinese society. More than a third are from China’s ruling Communist Party. Others represent ethnic minorities and smaller political parties.

The group has also included well-known figures like Hong Kong actor Jackie Chan and basketball star Yao Ming.

The CPPCC doesn't make any laws - that power belongs to the NPC.

The latter comprises nearly 3,000 members, making it the largest parliamentary body in the world. It's even bigger than its equivalents in the US and United Kingdom combined.

Delegates are selected through a process which state media and officials have called China’s version of democracy.

They are first nominated by the Communist Party before being voted in by local representatives. Those selected serve for five-year terms.

Dr Chen Gang, a senior research fellow with the East Asian Institute at the National University of Singapore (NUS), said representation in both bodies has become more diverse, especially after China’s reform and period of opening up in the 1980s.

There's now a greater focus on professionals and prominent figures without party affiliation, he noted.

“We do think that the Communist Party is dominating the whole process. But in reality, I think since policymaking is so complicated, they have to listen to the different voices from different sectors, different regions, and also people with different backgrounds,” Dr Chen added.

“So in this process, I do think that the delegates to the CPPCC and NPC play a very important role, especially during the Two Sessions period.”

Who are some key people to look out for? 

The current make-up of the NPC and CPPCC was decided on in 2023, after the last five-yearly leadership reshuffle.

Notably, missing from the latest participant list were several high-profile Chinese tech firm heads - including Tencent’s chairman and CEO Pony Ma, who was an NPC delegate for a decade; and search engine giant Baidu's CEO Robin Li, who was a CPPCC member. 

This came amid a regulatory crackdown on tech companies that began in 2020.

Observers have also noted that Alibaba’s founder Jack Ma hasn't been a member of either of these bodies.

But tech firms haven't been left out completely.

There’s lower-level representation from Alibaba and JD.com, as well as from other new industries China's been keen to promote. 

These include the bosses of electric vehicle makers, like XPeng CEO He Xiaopeng, as well as Lei Jun - whose Xiaomi firm started making EVs last year.

It's noteworthy too that Chen Tianshi of homegrown artificial intelligence (AI) chip designer Cambricon Technologies was also included, amid an intensifying tech race with the US and a push for China to be self-sufficient.

How long do the Sessions run?

There's no fixed duration. For years, they ran for about two weeks, with one of the longest an 18-day stretch in 2018.

That year, the NPC passed an amendment to the constitution, which included the removal of presidential term limits. They also agreed on key personnel appointments, completing a five-yearly leadership reshuffle. 

The gatherings were shorter during the COVID-19 years - about a week. Despite the removal of remaining pandemic restrictions last year, the meetings also ran for eight days. 

The duration of this year’s gatherings has not been officially announced yet. But a notice from authorities - banning the use of drones and other low-altitude aircraft from March 1 to 12 - indicates the meetings could go on for as long as last year’s.

What actually happens during the Two Sessions? 

The centrepiece of the Two Sessions is at the opening of the NPC gathering, when the Chinese premier delivers the Government Work Report.

This document charts the policy blueprint for China for the rest of the year. It also includes the highly anticipated annual GDP growth target.

A Finance Ministry report detailing budget allocations is also among other documents released and closely scrutinised, especially for China’s defence spending for the year.

For the rest of the week, members of the NPC and CPPCC gather to discuss the work report, proposed legislation, personnel changes and other items on the agenda.

Top leaders are known to drop in on some of these meetings, while selected sessions are also open to the media.

In 2023, state media Xinhua reported Chinese President Xi Jinping saying during a CPPCC session that Western countries headed by the US have “contained, encircled and suppressed China in an all-round way, bringing unprecedentedly severe challenges to China's development”. 

Beyond the main events, news conferences also play out on the sidelines, providing a rare chance for local and foreign media to pose questions directly to China’s leadership.

The most well-attended sessions have included the Foreign Minister’s news conference.

This year, incumbent Wang Yi’s remarks will be closely watched for a wide range of topics, from any fresh signals of how China intends to deal with the US under the second Trump administration, to indications of China’s potential role in mediating the Ukraine war.

Can we expect any surprises? 

While the meetings are typically highly choreographed, with the agenda set in advance, events aren't always completely predictable.

Last year, the NPC spokesperson announced ahead of its opening that it would do away with the Chinese premier’s meet-the-press session, which typically took place after the close of meetings. 

This upended decades of tradition and took some observers by surprise.

The session was often where more details of the Government Work Report were shared by China’s No 2 official. The premier would also field a wide range of questions on issues from the economy to foreign relations.

Analysts told CNA the function of the political gatherings has evolved through the years, in parallel with China moving from a low- to middle-income development stage. 

“In the past, the Two Sessions mostly served an agenda-setting (purpose) … but now it no longer suggests that’s the case,” said Associate Professor Alfred Wu from NUS' Lee Kuan Yew School of Public Policy.

“It's much more like a national level meeting, where they try to emphasise something that’s been passed down from top leaders.”

What key issues are likely to be raised? 

Assoc Prof Wu, who was a journalist in China from 2000 to 2007, said the leadership would be keen to send a message of Beijing being in good shape economically; and of being a good place for investment, especially for foreign firms.

These are the expected focus areas. 

Domestic consumption

According to CEIC data, household savings increased in January to 5.52 trillion yuan, up from 2.19 trillion yuan in December 2024.

Yet consumers are not spending enough, with total retail sales of consumer goods reaching 48.79 trillion yuan in 2024, marking a 3.5 per cent year-on-year increase - a far cry from the 8 per cent figure in 2019 before the pandemic.

Chinese officials have stated that boosting domestic consumption is a primary goal this year, as weak domestic demand continues to slow down overall economic growth.

The government has so far implemented measures including an expanded trade-in scheme offering subsidies on digital goods like smartphones and household items.

“We see that transaction of retail sales of electronic products increased by nearly 200 per cent during Chinese New Year,” said the Economist Intelligence Unit's Yue Su.

“However, if you look at the Consumer Price Index (CPI), the price level of that product, we didn't see an increase of price, which is an indication that demand remains relatively weak.”

Economists believe that household cash incentives will not immediately translate into retail sales. Instead, they hope to see more support for the private sector as well as the unemployed, at this year’s Two Sessions.

“The private sector is really important. It accounts for 70 per cent of (total) job creation and nearly 90 per cent of new job creation,” said Ms Su.

Tech, especially AI

If one of the keys to solving unemployment is to spur economic growth, then technological innovation is expected to be a key strategy for China to drive that development.

Recent policy signals indicate a strong governmental push in this area. For instance, the Central Economic Work Conference late last year introduced an "AI+" strategy to integrate the capability across various industries.

Greater technological self-reliance is likely to be emphasised at the Two Sessions, as the US moves to hinder China's progress such as with restrictions on advanced AI chips.

Recent statements by top leaders back this up. When Mr Xi held a high-profile meeting with China's top tech leaders in February, the president urged companies to prioritise breakthrough advancements and reduce reliance on foreign technology, particularly in AI and semiconductor manufacturing. 

He also reassured business leaders of continued policy support.

Ms Shan Guo, partner at the Hutong Research advisory, said the meeting underscored Beijing’s resolve to cultivate a thriving domestic tech sector. 

“For President Xi to chair a meeting with private business leaders, he brings confidence back to the economy, and he's saying that I value your input to the economy. I see your importance, and I encourage you to lead.

"Tech is China's breakthrough to all of the geopolitical challenges in the long term.”

When Premier Li Qiang delivers the Government Work Report on Wednesday, he will likely steer the Two Sessions to include discussions on measures related to addressing challenges posed by American technology restrictions.

Potential areas of focus could include increased investment in research and development (R&D) and policies aimed at supporting the growth of domestic tech industries.

Whatever the case, the international community will be observing China's approach closely.

The low-altitude economy

This refers to manned and unmanned aviation activities below 1,000m, though it could extend to 3,000m in some localities.

Examples include electric vertical take-off and landing aircraft, drone delivery services and first-person-view drones. Notable companies in this space include Shenzhen-based DJI and EHang, which is headquartered in Guangzhou.

Last year, the low-altitude economy was included in the Government Work Report for the first time, as a new growth engine.

But it was only at the end of 2024 that China's National Development and Reform Commission created a Low-Altitude Economy Development unit – a rare move to drive growth in a specific sector.

Authorities expect the sector to be worth over US$200 billion by this year, and double that amount in 10 years; while providing about 1 million jobs.

At least 20 provinces and cities have released targets for this new economy. Guangdong province, for instance, proposed building a low-altitude economy hub by 2026, pledging government funds to support the endeavour. The plan could pave the way for low-altitude air routes between Guangdong and Hainan.

The low-altitude economy can be applied to traditional sectors like logistics, construction and transportation, and could have a transformative effect throughout China.