As the world faces mounting geopolitical uncertainties and economic turbulence, all eyes are on China’s two sessions — the annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference National Committee. More than just high-level domestic policy meetings, these sessions offer profound insights into China’s economic trajectory, technological aspirations, and foreign policy direction. For investors, businesses, and global policymakers, the outcomes of these deliberations hold significant implications.

China, as the world’s second-largest economy, has in recent decades become an anchor of stability and a catalyst for global economic growth. Its policy decisions impact global markets, supply chains and investment flows. This year’s two sessions carry heightened significance as Beijing navigates external headwinds, recalibrates its economic growth model, and reaffirms its commitment to continuing reform and opening-up, and promoting innovation.

Reshaping growth model

Since paramount leader Deng Xiaoping’s landmark reform and opening-up policy was implemented in 1978, China has lifted over 800 million people out of poverty. However, the traditional drivers of its meteoric rise — export-led manufacturing and real estate development — are encountering some structural headwinds. The Government Work Report presented by Premier Li Qiang at the Wednesday opening of the annual meeting of the NPC signals a decisive shift toward a more sustainable, high-quality and innovation-driven growth model.

A key priority will be bolstering private sector confidence. With the private sector contributing over 60 percent of GDP, 80 percent of urban employment, and nearly 90 percent of new job creation, its revitalization is crucial. Li promised to create a suite of market-friendly policies and measures to spur the growth of the private sector, protect the lawful rights and interests of private enterprises and entrepreneurs, and encourage private enterprises with appropriate conditions to institute and refine modern corporate systems.

Efforts will also be made to make China a favored destination for foreign investment, including ensuring national treatment for foreign-funded enterprises in areas such as access to production factors, license applications, standards setting, and government procurement.

Accelerating tech self-reliance

As technological decoupling efforts by some Western powers intensify, China has turned this challenge into an advantage and intensified its strategic push for self-sufficiency in critical sectors. President Xi Jinping’s recent high-profile engagements with leading tech entrepreneurs underscored Beijing’s recognition of private-sector innovation as a key driver of China’s stunning technological rise.

The Government Work Report emphasizes the need to invigorate China through science and education, and boost the overall performance of the country’s innovation system. To this end, policy initiatives will be implemented to build a high-quality education system, enhance self-reliance and strength in science and technology, and beef up the overall caliber of talent.

Li also proposed actively fostering emerging industries and future-oriented industries, such as biomanufacturing, quantum technology, embodied artificial intelligence, 6G technology, and the low-altitude economy by establishing a mechanism to increase funding for them.

Unlocking domestic consumption

Despite an astounding $5.52 trillion yuan ($761 billion) surge in household savings as of early 2025, consumer confidence remains cautious. While previous stimulus measures, such as trade-in subsidies for appliances and electric vehicles, provided a temporary boost, a more structural approach is necessary to sustain and boost domestic demand, and thus strengthen the domestic economy.

In relation to this, the Government Work Report suggests introducing initiatives to create more jobs, increase people’s incomes and reduce their burdens, and provide more incentives to stimulate consumption.

Global integration: A pragmatic commitment to openness

At a time when protectionism and trade fragmentation are reshaping global commerce, it is reassuring that China’s commitment to international economic engagement remains resolute. Li pledged to promote reform and development through greater openness. That means “to steadily expand institutional opening-up and take the initiative to open wider and advance unilateral opening-up”.

It is based on this kind of thinking that the Belt and Road Initiative is evolving toward high-quality, sustainable projects, while new free trade agreements and relaxed foreign investment regulations in finance and high-tech manufacturing reinforce China’s role as a central player in global trade.

Beijing’s recent bold push to liberalize its tourism industry by granting visa-free entry to visitors from multiple countries exemplifies its growing confidence in economic openness. This policy is expected to significantly boost economic activity, particularly benefiting grassroots small and medium-sized enterprises across China, especially in rural regions which have vast tourism potential.

Furthermore, the two sessions will likely see announcements on enhanced business transparency, stronger intellectual property protections, and streamlined regulatory processes — critical factors in sustaining China’s competitiveness as an investment hub. With rising competition from Southeast Asia and India, ensuring investor confidence remains paramount to China’s economic resilience.

China at a pivotal juncture in global transformation

This year’s two sessions will chart China’s next phase of development, striking a delicate balance between economic resilience, technological leadership, and global engagement. Challenges persist, from a softening real estate market to external trade pressures and demographic shifts. However, China’s leadership has repeatedly demonstrated strategic adaptability and an unwavering commitment to reform.

As Li delivered the Government Work Report, the world was listening. The policies unveiled will not only define China’s economic trajectory but also influence the next wave of global technological and economic transformation. If Beijing successfully executes its comprehensive reform agenda, China will not only sustain its crucial growth but also emerge as an even stronger force and dynamic catalyst in shaping the future of a better global economy.

The author is an economics and politics analyst, award-winning columnist of Philippine Star and Abante, college teacher, book author, real estate entrepreneur, and moderator of the Pandesal Forum.

The views do not necessarily reflect those of China Daily.