China Sets Sight on Self-Reliance, Innovation and Prosperity at Two Sessions 2026
Kick-Off of Two Sessions 2026 and 15th Five-Year Plan
As is the tradition every year in March, the CPPCC and NPC meetings, known as the #TwoSessions, kicked off on 3 and 4 March 2026. The Two Sessions 2026 (#TwoSessions2026) is expected to last about one week and is expected to end on the 11th of March 2026. The particularity of this edition is that it is the start of the 15th Five-Year Plan (#FYP15), spanning from 2026 to 2030.
Macroeconomic KPI
Given the challenging global environment, the GDP growth is allowed to fall within a range of 4.5% to 5%, rather than the hard 5% of the previous year. Budget discipline will be maintained with the deficit within 4% of GDP. Inflation will be controlled at around 2%. Defense spending will be slightly lower at 7%, compared to 7.2% in 2025. At least 12 million new jobs will be created in urban areas.
Compared to the previous Two Sessions in 2025, the macroeconomic targets mostly did not change. This would signal that the Chinese Government is privileging stability and consistency during these tumultuous times.
Shift from Pure GDP Growth to Quality Development
While previously, local government cadres were assessed mostly on GDP growth, the assessment will now favor high-quality development, which entails other dimensions such as social and environmental factors.
Technology Self-Reliance
The #FYP15 highlighted several sectors and technologies where China will work to achieve self-reliance. The sectors are considered critical for national security and economic competitiveness. They include:
- Artificial Intelligence (#AI)
- Semiconductors
- Advanced Manufacturing
- Robotics and Humanoid Robots
- Quantum and Super Computing
- 6G Telecommunications
- Aerospace
The Government plans to allocate 3.2% of GDP to Research and Development. Under AI+ initiative, China will foster the adoption of AI and robotics in a variety of sectors. China has decided to adopt an open-source model to foster cooperation, foster innovation, and offer certain innovations as a public good. Thus, it has opened the source souce of its AI and Quantum Computing engines.
Emerging Industries
In addition to the above, China highlighted a number of emerging industries that can contribute to its growth in the future. These are sectors where China aims to achieve leadership and they include:
- Biotech and Pharma
- Low-Altitude Economy and Drones
- New and Clean Energy
- Metaverse, VR & Ar
- Brain-Computer Interface and Embodied AI
Energy Transition and Net Zero
China maintains its target to achieve NetZero by 2060. To achieve this, it will continue to promote solar (#PV), wind, and nuclear power generation. In light of the Iran-US conflict, China will have to find alternative sources of oil and gas.
China is pushing for the adoption of Electric Vehicles in the domestic as well as overseas markets. It is worth noting that BYD has surpassed Tesla in terms of total #EV sales.
Housing Crisis and Local Government Financing
Real estate used to account for a major share of the revenues of Local Governments, but with the housing glut, that revenue stream has basically stopped. Therefore, the Central Government will allow Local Governments to raise financing via Special Bonds to the tune of RMB 4.4 trillion. The proceeds will go mainly to fund infrastructure improvements.
Social Measures and Domestic Consumption
To reverse the demographic decline, China is incentivizing child births, and this year it plans to experiment with flexible working conditions for parents. In accordance with its means and needs, China plans to improve its pension and social coverage in order to bring back consumer confidence. At the same time, China hopes that these measures will give a boost to consumption and will further encourage Chinese citizens to ‘swap the old for the new.’
Strategic Objectives
The #TwoSessions2026 set the tone for the new chapter, and the #FYP15 provides direction for future development. China aims to become a prosperous and innovative nation by 2035. China is striving to shed its image of the factory of the world for low-cost, low-quality products and to evolve into a producer of high-quality, innovative products.