Navigating China’s economic evolution — Insights from China’s “two sessions”

As the curtains rise at the two sessions, China stands at a pivotal juncture, poised to navigate a course of economic rejuvenation and global leadership, shaping the contours of the 21st-century landscape in ways both profound and enduring.

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Deputies communicate during a break of the group meeting of deputies from the delegation of Yunnan Province at the second session of the 14th National People's Congress (NPC) in Beijing, capital of China, March 10, 2024. (Xinhua/Liu Xu)

by Sourabh Gupta

Amidst the anticipation surrounding China’s “two sessions,” one pivotal theme dominates: domestic economic policy. At a juncture where the economy grapples with underperformance, the spotlight intensifies on short-term interventions and long-term structural reforms aimed at propelling growth.

Central to the discourse are two critical fronts. First, the nature and scope of immediate governmental support to invigorate economic activity, and second, the depth of reforms steering China toward a more sophisticated economic landscape driven by advanced manufacturing, robust consumption, and service industries.

Crucially, this transformation hinges on empowering the private sector, ensuring equitable opportunities for enterprises, revamping fiscal frameworks, and recalibrating central-local government relations. While there is wide expectation for pivotal structural reforms to be unveiled at the Third Plenum (of the CPC Central Committee), early glimpses of the trajectory are expected during the “two sessions.”

Despite facing formidable challenges — ranging from the U.S.-initiated trade and tech tensions to the COVID-19 upheaval and the recent property market crisis — China is seizing opportunities amid adversity. The trade war impelled a revamp of its technology ecosystem, fostering indigenous innovation. Simultaneously, the property sector turmoil catalyzed a much-needed overhaul of the investment-heavy growth model, charting a course towards sustainability.

While grappling with short-term setbacks, China’s recalibrated growth model promises substantial long-term dividends. Non-property fixed asset investments attest to the economy’s resilience, laying the groundwork for a revitalized economic landscape. As China progresses towards a higher-quality growth paradigm, it emerges as an irresistible magnet for both domestic and foreign investors, poised to amplify its economic footprint manifold.

With China poised to ascend from an 18-trillion-U.S.-dollar economy to potentially double or triple its size, its allure for global investors is undeniable. However, accessing China’s market will demand astute strategies and relentless competition, reminiscent of the cut-throat environment of its reformative decades.

Moreover, China’s ascent isn’t confined to economic realms alone. As its capabilities burgeon, it is poised to shoulder greater responsibilities in shaping global public goods. From healthcare advancements to climate action and technological innovation, China is primed to emerge as a pivotal contributor, challenging traditional Western hegemony in these domains.

Regionally, China’s involvement in hot-button issues will intensify, contingent upon its geopolitical stakes. While it can play a proactive role in conflicts such as those in Myanmar or on the Korean Peninsula, its influence may be more circumscribed in others, reflecting the complex dynamics of major power relations.

Yet, beyond its economic and geopolitical heft, China’s trajectory of modernization serves as a beacon for the Global South, offering a nuanced alternative to conventional development paradigms. By championing a tailored approach to development rooted in its unique national conditions, China paves the way for other nations to carve their distinctive pathways to modernization, underscoring the imperative of contextualized solutions in the development discourse.

As the curtains rise at the two sessions, China stands at a pivotal juncture, poised to navigate a course of economic rejuvenation and global leadership, shaping the contours of the 21st-century landscape in ways both profound and enduring.

Editor’s note: Sourabh Gupta is a senior fellow at the Institute for China-America Studies in Washington, D.C. The views expressed in this article are those of the author’s own

Xinhua News Agency

Founded in 1931, Xinhua News Agency is one of the largest news organizations in the world, with over 10,000 employees across the globe. As the main source of news and information for China, Xinhua plays a key role in shaping the country's media landscape and communicating its perspectives to the world. The agency produces a wide range of content, including text news articles, photos, videos, and social media posts, in both Chinese and English, and its reports are widely used by media organizations around the world. Xinhua also operates several international bureaus, including in key capitals like Washington, D.C., Moscow, and London, to provide in-depth coverage of global events.

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