In this new blog, Paul Ainscough at Global Situational Awareness gives some insight into China’s Two Sessions political gatherings in Beijing, what they are and why they are so important.

China’s annual Two Sessions political gatherings began in Beijing on 04 March 2026, with the opening of the Chinese People’s Political Consultative Conference (CPPCC). The National People’s Congress (NPC) started one day later. The former concluded on 11 March 2026, while the latter finished one day later. Although the meetings are held separately, they also transpire at the same time. While the CPPCC is an advisory body, it has little real political influence, whereas the 3,000 member NPC is the legislative body of the Chinese Communist Party. The significance of the meetings derive from the setting of official economic targets, announcement of military budgets, and changes in the ranks of party leadership. Notable policy changes overseen by the Two Sessions in the past have included the formalisation of Chinese President Xi Jinping’s third-term as leader in 2023, as well as the unveiling of the National Security Law in 2020, which is now in place over Hong Kong.

This year, attention is focused on the 15th five-year plan, which will set out Beijing’s economic strategy from 2026 until 2030. With the key points of the plans for discussion being released in 2025, analysts already had an idea of the themes before the meetings began. Commentators expected subjects such as boosting domestic demand, increasing China’s capacity in cutting-edge technologies (such as nuclear fusion and advanced semiconductors), and reducing economic reliance on the United States (US) to feature.

Purges of the People’s Liberation Army

This year’s Two Sessions was held in the shadow of a major shakeup in the ruling body of the People’s Liberation Army (PLA). In January 2026, Chinese President Xi Jinping placed his top general, Zhang Youxia, under investigation for corruption and disloyalty. Zhang was widely seen as Xi’s closest military ally. Another military officer, General Liu Zhenli, was also placed under investigation. Their expulsion came just months after the removal of nine top generals in October 2025. A statement from China’s defence ministry said they were suspected of serious financial crimes. As recently as 03 March 2026, China removed three retired military generals from the CPPCC. Analysts believe the moves could be political purges rather than part of an anti-corruption drive. Experts have been monitoring for absences at the congress as failure to attend can signal that an individual is in trouble and being targeted. While no reports have emerged yet concerning new absences, with the meetings only just concluding, it may take time for any further disciplinary action to become apparent.

China lowers its annual growth target

On 04 March 2026, China lowered its gross domestic product (GDP) growth target for 2026 to between 4.5% and 5%. The figure is the lowest to be set by the Chinese Communist Party (CCP) since the early 1990s. The move has been attributed to persistent deflationary pressures and ongoing trade tensions with the US. Beijing also kept its budget deficit target unchanged from last year’s “around 4%”, which was the highest on record since 2010 when first set in 2025. Additionally, China seeks to keep the urban unemployment rate, which stood at 5.2% last year, at around 5.5% this year and to add 12 million new jobs in urban areas. While China’s economy expanded by 5% last year, the country has entered a fourth year of deflation amid a real estate slump, weak consumer confidence, and local government debt stress. Xi will be fully aware of the importance of navigating these economic challenges in portraying the country as a beacon of stability.

China codifies ethnic assimilation

On 12 March 2026, China passed the Law on Promoting Ethnic Unity and Progress. Analysts say the move, which was endorsed by the NPC at the end of the Two Sessions, is intended to assimilate the country’s minority groups. However, critics say it will further erode the rights of such groups. Under the terms of the law, all children must be taught Mandarin before kindergarten and up until the end of high school. Previously, students were allowed to study most of the curriculum in their native language, such as Tibetan, Uyghur, or Mongolian. The law also provides a legal basis to prosecute parents or guardians who may instil what it described as “detrimental” views in children which would affect ethnic harmony. Additionally, fears have grown over the law’s call for “mutually embedded community environments”, which some analysts believe could result in the break up of minority-heavy neighbourhoods.

Business outlook: a change in direction

When growth has historically slowed in the past, China would typically respond by building more apartments, motorways, factories, and industrial parks. The strategy was one of expansion through state investment, exports, and a booming property market. This time, policymakers are emphasising the importance of raising household incomes and strengthening domestic consumption to grow the economy. This demonstrates a recognition that the old growth model no longer works. Regarding the specific measures being taken, announcements have included expanding services for the elderly, enforcing paid annual leave, and increasing support for families raising children. It remains to be seen whether these policies will significantly alter consumer behaviour. For businesses, the pivot suggests emerging opportunities in consumption-driven sectors. However, the transition is expected to be gradual and uneven rather than delivering a near-term demand boost.

Key takeaways

• China’s annual Two Sessions meetings have offered insight into the country’s direction in the coming years.
• The meetings have been overshadowed by a sweeping purge of China’s military leadership, fuelling speculation over political infighting at the top of the PLA.
• Beijing’s lowest GDP growth target in decades underscores mounting economic strain, as deflation, trade frictions, and structural weaknesses constrain China’s recovery despite ambitious employment goals.
• The passage of China’s new ethnic unity law marks a decisive shift toward enforced assimilation, deepening concerns over the erosion of minority rights and expanded state control over language, education, and family life.
• Beijing’s pivot from investment-led growth to boosting household incomes and consumption signals a recognition that China’s old economic model has run its course.

For more Global Situational Awareness news, click here