In this explainer piece, our APAC practice’s Senior Account Executives, Soojin and Wesley, examine the key economic, technological, and political signals emerging from China’s 2026 Two Sessions amid an increasingly fragmented global environment.
Executive Summary
- China’s 2026 Two Sessions highlighted its efforts to recalibrate economic and strategic priorities amid growing geopolitical uncertainty and the launch of the new Five-Year Plan (2026–2030).
- China continues shifting from high-speed growth toward “high-quality development,” with stronger emphasis on economic resilience, domestic demand, industrial upgrading, and green transition policies.
- Technological self-reliance remains a core priority, with expanded support for semiconductors, AI, advanced manufacturing, and other strategic technologies.
- The sessions also reinforced centralised governance and national security-oriented policymaking, suggesting continued state-led oversight and rising regulatory complexity in strategic sectors.
Strategic context: the “Two Sessions” in a volatile global environment
China’s 2026 ‘Two Sessions’ (两会), known as the annual meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), take place at a moment of heightened geopolitical and economic uncertainty. Set against the backdrop of the Iran–US war and disruptions in the Strait of Hormuz, this year’s sessions offer a critical window into how Beijing is recalibrating both its domestic priorities and its external posture. While the meetings are often characterized as procedural, they remain a key platform for signaling policy direction. In 2026, their significance is further elevated by the launch of the 15th Five-Year Plan (2026–2030), which will guide China’s strategic trajectory in an increasingly fragmented global environment.
Rebalancing growth: from expansion to resilience
A central theme emerging from this year’s sessions is the leadership’s continued pivot away from high-speed growth toward what it terms “high-quality development.” The government’s decision to set a GDP growth target of 4.5 to 5 percent reflects a more flexible and risk-aware approach to macroeconomic management. This adjustment is not merely cyclical but structural. Slower productivity growth, demographic pressures, and ongoing adjustments in the real estate sector have reduced the feasibility of rapid expansion, while geopolitical tensions and trade frictions have introduced additional volatility into external demand. In this context, Beijing appears less concerned with short-term growth than with ensuring its long-term sustainability.
This suggests that the Chinese government is likely to further strengthen long-term policy support for strategic industries and key technological sectors aimed at securing future growth drivers. In particular, beyond industries currently at the centre of global technological competition such as AI and semiconductors, China is also expected to expand support for next-generation technologies including quantum science, 6G, and Brain-Computer Interface (BCI) technologies in an effort to enhance national technological self-sufficiency and industrial competitiveness. This trend reflects China’s growing emphasis on structural stability and the development of long-term economic foundations centred on strategic industries, rather than prioritising short-term growth expansion.
Economic resilience and domestic rebalancing
This shift is accompanied by a stronger emphasis on economic resilience. Policymakers are prioritizing the expansion of domestic demand as a stabilizing force, with measures to boost household income, strengthen employment, and encourage consumption. This reflects a broader effort to rebalance the economy away from its historical reliance on exports and investment-led growth. At the same time, the sessions highlight continued support for industrial upgrading, with a focus on advanced manufacturing and higher value-added production. These efforts are closely linked to productivity gains, which are increasingly seen as the primary driver of future growth. In parallel, the green transition remains a core pillar of policy, not only for environmental reasons but also to enhance energy security and reduce exposure to external shocks.
This trend is also closely linked to several major legislative initiatives reviewed and advanced during this year’s Two Sessions. In particular, the “Ecological and Environmental Code of the People’s Republic of China (中华人民共和国生态环境法典)” marks the second case in China’s legislative history to be formally designated as a “Code (法典).” The legislation reflects Beijing’s intention to systematically consolidate previously fragmented environmental regulations while strengthening the national framework for green growth and ecological protection. This move can be interpreted as part of China’s broader effort to institutionalise green industries and energy transition policies at the national strategic level, extending beyond environmental policy alone. As a result, global investors with interests in sectors such as electric vehicles, batteries, renewable energy, and green infrastructure are likely to require closer monitoring of China’s evolving environmental regulations and industrial policy direction.
Securing Critical Capabilities: Advancing Technological Self-Reliance
In relation to technological self-reliance, China had already introduced the “Dual-Circulation (双循环)” strategy in 2020, positioning domestic demand-driven growth and supply chain resilience as core pillars of its national economic strategy. Technological self-reliance stands out as a defining priority of the 2026 agenda and a cornerstone of the new Five-Year Plan. Beijing is intensifying its efforts to secure control over critical technologies, including semiconductors, artificial intelligence, and advanced materials. This push is both economic and strategic in nature, reflecting a response to external constraints such as export controls and restrictions on technology transfer. By strengthening indigenous innovation capabilities, China aims to reduce its dependence on foreign inputs while positioning itself more competitively within global value chains. The growing emphasis on what policymakers describe as “new quality productive forces (新质生产力)” encapsulates this ambition, pointing to a future growth model driven by innovation, digitalization, and technological advancement rather than scale alone.
In addition, within the global investment environment, sectors receiving strong state support and aligned with China’s technological self-sufficiency objectives are likely to attract sustained strategic attention and long-term investment interest. This reflects China’s efforts to build a stronger domestic market capable of withstanding geopolitical risks and external uncertainties, including conflicts such as the Iran war, while simultaneously elevating self-reliance in advanced technologies to a national priority amid intensifying US restrictions on Chinese technology development. This trend suggests that China is increasingly integrating technological security and economic security into its long-term national strategy.
Political stability remains central to China’s strategic agenda
At the political level, the Two Sessions reinforce a clear message of continuity and control. The National People’s Congress continues to function primarily as a formal legislative body that endorses decisions already shaped by the Communist Party leadership, underscoring the centralized nature of policymaking. Recent anti-corruption campaigns and institutional adjustments highlight an ongoing focus on discipline and cohesion within the political system, reflecting the leadership’s view that internal stability is essential for navigating external uncertainty. Although the Chinese People’s Political Consultative Conference provides a forum for consultation and policy discussion, its role remains largely advisory, serving more to signal inclusivity than to shape substantive outcomes.
From the perspective of global businesses and investors, the strengthening of China’s centralized governance suggests that state-led regulation and oversight over key strategic industries are likely to expand further as US-China technological competition and geopolitical risks intensify. In particular, sectors considered sensitive or closely linked to national security may face higher market entry barriers and increasing regulatory uncertainty. Moreover, China’s continued emphasis on national security-oriented “Chinese-style modernisation (中国式现代化)” highlights the growing need for investors to develop a deeper understanding of the country’s industrial policies and evolving regulatory direction.
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