China’s ‘two sessions’: an economic watershed or just more of the same?

China’s annual gathering of its legislative and political advisory bodies – known as the “two sessions” – is one of the key events in the country’s political calendar and provides a rare opportunity for observers to get close to its movers and shakers.

This year’s meetings come as China continues to fight a trade war with the United States and battle the headwinds of an economic slowdown. They also mark 12 months since Xi Jinping amended the constitution to remove a presidential term limit and arrive as the nation prepares to celebrate 70 years of Communist rule.

In the third of a three-part series about the key issues facing this year’s “two sessions”, we look at economic challenges China and Xi have to face.

History may record that this year was a watershed for China, when Chinese leaders started taking the steps to change course and remove the structural obstacles to the country’s further development to become the world’s largest economy.

Or it may show leaders stayed their course, with the Chinese economy continuing to muddle along, trapped by its unwillingness to set its “animal spirits” free.

The meetings of the “two sessions” – the National People’s Congress (NPC), the country’s parliament where major policies are ratified, and the Chinese People’s Political Consultative Conference, the government’s top political advisory group – could give strong evidence over the next two weeks of the direction China’s leaders will choose.

With increasing headwinds buffeting the Chinese economy, some 3,000 of China’s most powerful officials and political elite will gather in Beijing to confront the dilemma between supporting near-term growth and undertaking the economic restructuring necessary to complete the shift to sustained, domestic demand-led growth.

By anyone’s estimate, China has performed an economic miracle in the last 40 years, transforming from a backward, rural country into the second largest economy in the world.