China’s Parliamentary Session Begins: Main Foreign Policy Takeaways
Opening meeting of the 14th National People’s Congress at the Great Hall of the People in Beijing. Photo Credit: Xinhua
Yesterday marked the start of China’s 14th National People’s Congress (NPC) in Beijing, a week-long meeting attended by top Chinese Communist Party (CCP) leadership including Chinese President Xi Jinping, the Politburo Standing Committee, and over 3,000 delegates from across the country. The session, also known as Two Sessions, is a means for top leadership to convey decisions about the priorities of the CCP for the next year, including economic and foreign policy decisions.
Notably, this NPC comes at a tumultuous time, with U.S. President Trump’s implementation of an additional round of 10% total tariffs on Chinese exports on March 4, right before the beginning of the session; these tariffs are in addition to the previous 10% levied last month. China had responded to February’s tariffs with an increase of their own, with “15% duties on coal and liquefied natural gas (LNG) products, and a 10% tariff on crude oil, agricultural machinery and large-engine cars imported from the U.S.” Then again on Tuesday, they announced another series of tariffs (of up to 15%) on additional US goods—largely agricultural—starting March 10.
The tariffs levied against China are significant, and may alter CCP discussions and plans moving forward. China is a manufacturing superpower, reliant upon exports as about20%of its GDP. Importantly, Chinese exports to the U.S. have lessened due to President Trump’s trade war during his first term (21.6% oftotal U.S. importsin 2018 to 13.4% in 2024), somewhat reducing this impact.
Premier Li Qiang delivers the opening speech of the NPC on March 5. Photo credit: Xinhua
The policy plans presented at the beginning of the NPC were delivered in a speech by Premier Li Qiang, who articulated that foremost, the government will be promoting an economic growth target of 5%. Considering that some economists have predicted the back-and-forth tariffs will impact Chinese economic growth by 1.1%, the policy plan was dependent on boosting domestic consumption, making it the “main engine and anchor of economic growth,” as opposed to exports. Domestic consumption within China has been low in part due to a property slump, which has caused consumers to restrict spending. In fact, “China's household spending is less than 40% of annual economic output, some 20 percentage points below the global average,” a fact which is concerning to the Chinese government amidst this potential economic instability.
Another plan presented by Premier Li was a renewed commitment to raising its defense budget by 7.2%, the same amount as last year, for a total of $245 billion. While significant, the percentage is less than neighbors India, Japan and the Philippines. Yue Gang, a military analyst and former colonel in the People’s Liberation Army (PLA), argued that this reflects how the “international and Taiwan Strait situation had a limited impact” on Chinese policy making. Opposingly, “[t]he Pentagon and many experts say China’s total spending on defense may be 40% higher or more because of items included under other budgets,” indicating that perhaps the CCP is spending more surreptitiously, but interested in maintaining the narrative that it is keeping defense spending under 1.5%, in comparison to the U.S. which has not cut its spending.
One motivation for continuing to boost defense spending remains Taiwan, the democratically governed island which China claims as its own territory. In his speech, Premier Li stated that a 2025 policy goal is to “resolve the Taiwan question,” purportedly by de facto annexing the island. Further, that “Beijing opposes separatist activities aimed at Taiwan’s independence and external interference in relations across the Taiwan Strait” in reference to U.S. defense of the island and international discussions about Chinese aggression. In fact, at the same time on Wednesday as the NPC, a contingent of Chinese military ships and planes were sent near Taiwan, another step in a pattern of aggressive measures intended to threaten and demoralize the island. The Taiwan question will likely be incredibly potent in international geopolitics in the coming year.
President Xi Jinping will not speak to the large session but rather in smaller talks over the course of the week-long conference. Many will be listening closely in these conversations, searching for indications about future U.S.-China dynamics or plans for Taiwan. Considering that the policy plans articulated at this conference have been known for months—and are in fact in line with long-term plans, rather than reacting to recent events—analysts will be focused on his changes in language and personal inflections upon those two crucial issues. President Xi also dictates the wording of speeches, so any changes in the foreign minister's press conference on March 11 may be significant.