China’s National People’s Congress: Hyperbole and Skepticism

A general view as delegates attend the closing session of the National People's Congress (NPC) at the Great Hall of the People in Beijing on March 11, 2025. China's annual political gathering, known as the Two Sessions, convenes leaders and lawmakers annually to set the regime's agenda for domestic economic and social development for the year. Lintao Zhang/Getty Images

Commentary

The weeklong meeting of China’s National People’s Congress (NPC) concluded on March 11. Although accurately described as a rubber stamp body, it is closely watched because the policies that are rubber-stamped give important clues to the leadership’s goals for the year ahead.

While Premier Li Qiang’s lengthy work report addressed many important issues like education, medical care, urbanization, and environmental pollution, the two that most interested foreign observers were the economy and the military.

With regard to the former, in this final year of the country’s 14th Five-Year Plan, the forces that had driven China’s rapid ascent to the world’s second-largest economy appear to be running out of steam.The “about 5 percent” increase in gross domestic product that the work report anticipates is regarded as notional rather than a reachable target, with even Chinese economists privately confiding that 2 percent is a more realistic figure.

The official 5 percent target claimed for 2024 was similarly discounted by professional economists. The real estate sector, which amounts to a quarter of total GDP, remained depressed as home prices continued to fall. The employment rate for recent college graduates is worrisomely high. And prices for electric vehicles fell 6 percent year on year. 

While much of the world worries about inflation, Beijing’s concern is deflation. As the NPC was meeting, China’s National Bureau of Statistics revealed that the country’s consumer price index had declined by 0.7 percent year on year. The Chinese Communist Party (CCP) has introduced measures to stimulate the economy, including reducing credit costs and offering consumers subsidies for trading in their older appliances for newer models. Other measures enacted last year failed to produce the hoped-for stimulus effect, and it remains to be seen whether these prove more effective.

Two weeks before the congress began, in a tacit admission that CCP leader Xi Jinping’s efforts to bring entrepreneurs more firmly under his control had stifled creativity, he unexpectedly hosted a high-profile forum with a number of them, including some who, like Jack Ma, had previously been criticized for their outspokenness.  

The CCP hopes to bring China out of its economic doldrums by developing its tech sector, with expectations buoyed by the introduction of DeepSeek. This surprise artificial intelligence (AI) startup costs a fraction of similarly powerful foreign competitors and threatens the dominance of AI leaders like Nvidia. Spin-off effects are anticipated. For example, cheaper AI may enable other innovators to design new applications, and investment in data centers has increased markedly.

Yet the tech boom may not last, since ambitious companies may be unable to monetize AI. Access to advanced semiconductors in terms of the quantities and qualities needed could also be a problem. The United States has led an effort to restrict the sale of high-end chips to China, while the PRC’s state-owned SMIC has serious capacity shortfalls and remains unable to produce the most advanced semiconductors. 

Delegates from the Chinese military line up before the closing session of the National People's Congress at the Great Hall of the People in Beijing on March 11, 2025. Kevin Frayer/Getty Images

The military presents other challenges. Even before the NPC meeting began, the dearth of military representation aroused foreign interest. Down from 281 at the last meeting in 2023 to 267 (out of a total of 3,000), it reflects the removal of 14 of China’s highest-ranking military figures for what the CCP calls “disciplinary violations”—generally understood to mean corruption. 

Since Xi’s campaign against corruption is now well into its second decade—and since all top military people are carefully vetted before their appointments are made—one must wonder at the process involved. What this means for military preparedness is debatable. One expert points out that the purges have only rarely affected operational commands; those affected were the officers who ignored Xi’s directives to abide by high professional standards. Others argue that military morale at the highest levels cannot fail to have been affected, as officers wonder who is next. 

The diminution in numbers does not mean a lessening of interest in the military: next year’s budget is a 7.2 increase over last year. Compared with an overly optimistic economic growth rate of about 5 percent, this arouses foreign anxieties about Beijing’s intentions.

Within the past year, the Fujian, the country’s third aircraft carrier and the first equipped with electromagnetic catapults, began sea trials, and the Sichuan, the world’s first electromagnetic catapult-equipped amphibious assault ship, was launched. China’s second type of stealth fighter, the J-35 A, made its debut at Airshow China 2024. Chinese analysts termed the budget increase moderate in light of the complex security environment the country faces, citing continued Philippines provocations around “Chinese islands and reefs” and Taiwan independence secessionists continuing to resist “reunification.”

Other countries hold the PRC responsible for this complex security environment.

China has been mapping the seabed worldwide, which has obvious implications for military use. The aforementioned islands and reefs are within the Philippines’ exclusive economic zone; hence, Manila regards the PRC’s behavior as confrontational. 

The overwhelming majority of Taiwanese are opposed to annexation by China, a country they have never been part of, and reject the term “reunification.” The Chinese military continues to conduct maneuvers constricting Taiwan’s air and maritime space. It has been flexing its muscles throughout the East China and South China seas, harassing Japanese fishermen and even conducting live-fire naval exercises off Australia.

These gray zone operations, designed to stay below the threshold that could trigger a kinetic response, have enabled the military to push deeper into contested areas while exhausting opponents—in essence, according to a Wall Street Journal analysis, creating a death by a thousand cuts. Meanwhile, Chinese authorities have termed protests by aggrieved powers “hyping the China threat.”

Gray zone operations run a serious risk of unwanted escalation into armed hostilities as China’s neighbors take steps to protect themselves.

The disconnect between China’s declining economic growth and its ever-expanding military budget, as demonstrated in the latest NPC report, highlights the regime’s deepening instability. This trajectory only exacerbates internal contradictions, ensuring that long-term success remains out of reach. As former CCP leader Deng Xiaoping warned, and as the Soviet experience demonstrated, a strong military cannot be grafted onto a weak economy.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.