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Femy Francis
15 March 2026 |
What happened?
On 12 March, China concluded its annual “Two Sessions” meeting of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC).
The highlights of the meeting included the 15th five-year plan, an enhanced Chinese defence budget, and the inclusion of an ethnic law that makes Mandarin compulsory for ethnic minorities.
The meeting featured a “work report” by Chinese Premier Li Qiang, outlining a list of priorities for 2026. China’s President Xi Jinping called to develop the “new quality productive forces,” and said: “The need is to seize the opportunities to nurture emerging and future industries, and to transform and upgrade traditional industries at the same time.”
China’s Foreign Minister Wang Yi addressed US-China relations, noting that this will be the year of high-level exchanges and that China will be an important force for global peace and stability.
What is the background?
1. A brief note on China’s National People’s Congress (NPC)
The NPC is the highest organ of state power in China and, in principle, the supreme source of law. The NPC has representatives elected from 35 electoral units, including provinces, autonomous regions, municipalities, and the PLA. They are in office for a term of five years. The 3,000-member NPC is the Chinese Communist Party’s legislative body, but is largely a “rubber stamp” parliament, having never rejected a bill put before it.
2. A background to the Chinese People’s Political Consultative Conference (CPPCC)
The CPPCC can be seen as the third unofficial tranche of Chinese legislation, functioning only as an advisory body to the National People’s Congress. While China follows a one-party system, this office provides space for eight other political parties to be represented. They are the political consultation group to the NPC, representing China's minority voice.
3. A brief note on China’s Five-Year Plans
The five-year plans are blueprints issued by the Chinese government that set the nation's economic, developmental, and political goals. Where it’s set prioritises for the coming five years. The 15th five-year plan for 2026-2030 aims to accelerate high-quality growth, tech self-reliance, and further strengthen industrial security. It calls to develop clean energy and AI-based innovation. The previous five years’ plans under Xi Jinping pivoted towards innovation and the development of high- and sustainable-technology. It called for furthering domestic consumption and making China economically and technologically self-reliant, both of which are outlined in the 15th Five-Year Plan.
4. The Work Report and Defence Budget
Work reports are annual reports that outline the main development targets for the year. lists out the priorities for the year ahead, headed by China’s Premier Li Qiang. It aims to increase Gross Domestic Product growth by 4.5-5 per cent, increase the consumer price index by 2 per cent, create 12 million new urban jobs, and increase research and development spending by 10 per cent. Considering escalating tensions, China has also decided to increase the defence budget by 7 per cent, though it is the lowest hike since 2021. It is estimated that 1.7 per cent of China’s entire GDP would go to the defence budget, making it the second-largest military budget in the world.
5. Xi’s anti-corruption purge
Before the two-session meeting, there had been a major shakeup in the People’s Liberation Army. Xi Jinping put its senior leader under anti-purge investigation for “suspected serious violations of discipline and law.” Zhang Youxia is the joint vice-chairman of the Central Military Commission (CMC) and was second in command of the Chinese military. This has left a huge vacuum in China’s Central Military Commission: of the seven heads, only two remain, including Xi Jinping.
6. China’s ethnic minorities and efforts towards homogenization
The two sessions approved the controversial ethnic assimilation law for the minorities. The law calls for “ethnic unity” as it officially aims to integrate 56 recognised ethnic groups in China, while over 90 per cent belong to the dominant Han Chinese group. The law mandates that all children be taught Mandarin through high school. It can also prosecute parents or guardians for instilling “detrimental” views of children that can affect ethnic harmony in China.
What does it mean?
First, China is getting ready to face the changing global situation – political, economic and military. 2025 was a tumultuous year for China, with both highs and lows. As it grappled with the spillover effects of the Russia-Ukraine war and balancing its friendship with Moscow. China’s biggest challenge started with the election of US President Donald Trump, who started the tariff tensions with its liberation day tariffs. This led to a series of escalations by both China and the US, which eventually paused after China imposed restrictions on the export of critical minerals. It continued with the internal purging, barring none of the high-profile officials. The year also saw the rise of AI and AI-based innovation, as it continued to lead the green EV industry.
Second, China’s focus on defence, high-tech and green innovation. The 2026 two sessions meeting on recalibrating where China should invest. The hike in the defence budget aims to modernise Chinese military capabilities through innovation. It pushes for developing high-tech innovation and investments with dual-use capabilities. This does just mean monetary investments in start-ups and our upcoming tech giants, but also investments in research to develop newer technologies. Another pivot is towards the need to further green innovation, as the upcoming market it wants to dominate.
Third, strengthening self-reliance and the supply chain. Strained geopolitical tensions from the Russia-Ukraine war, US tariffs, and now the Iran-Israel-US war have shaken the supply chain. The 15th five-year plan and the Work Report call for fortifying their supply chain by diversifying investments and to have economic self-reliance by encouraging domestic consumption.
Fourth, Sinicisation of the minorities. While the majority of the Chinese population is Han Chinese, there are some other ethnic groups in China. From the late 2000s, China has been pushing for the Sinicisation of minority groups for a united national identity by assimilating these groups into Han culture. Minority groups from Tibet, Xinjiang and Inner Mongolia have been persecuted and exiled from China. Human Rights Watch accused China of abuse and human rights violations against these groups.
Femy Francis is a Project Associate at NIAS, Bengaluru. She coordinates the China, East Asia and the Pacific Area studies, focusing on both internal and external developments.
