H.E. Mr. Xu Feihong, Chinese Ambassador to India publishes an article titled "Four Signals Conveyed by China's Two Sessions" in The New Indian Express

• Marks policy direction at start of China’s 15th Five-Year Plan (2026).

• Shift from high-speed to high-quality growth (4.5–5% target), prioritizing reform, innovation, and sustainability toward 2035 goals.

• Accelerates AI-driven “smart economy” transformation across industries.

• Expands high-standard opening-up, boosting global business opportunities.

• Signals strong momentum in China-India ties, with record $155.6 billion trade and BRICS cooperation.

On March 16, 2026, H.E. Mr. Xu Feihong, Chinese Ambassador to India publishes an article titled "The new logic of the Chinese Economy" in The New Indian Express. The article presents four key “signals” from China’s 2026 Two Sessions—the annual meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC)—highlighting the country’s policy direction at the start of the 15th Five-Year Plan.

First, China’s economy is deliberately shifting from high-speed to high-quality growth. The government has set a 4.5–5% GDP growth target, which some view as conservative. However, the author argues this reflects a prudent strategy focused on structural reform, risk prevention, and transitioning from investment- and export-led growth to one driven by domestic consumption and technological innovation. Maintaining growth above roughly 4.17% annually would keep China on track to reach moderately developed-country status by 2035, aligning short-term targets with long-term goals.

Second, China is advancing toward a “smart economy.” Artificial intelligence (AI) is central to this transformation. Plans include building a unified national computing power network, expanding AI-enabled consumer products (such as smartphones, laptops, and connected vehicles), and integrating AI into industries like agriculture, manufacturing, healthcare, and education. The aim is to move beyond a digital economy to a more advanced, AI-powered development model.

Third, China is deepening its opening-up policy. Restrictions on foreign investment in manufacturing have been fully removed, and the focus is shifting to expanding access in services sectors. With retail sales surpassing 50 trillion yuan in 2025 and a growing middle-income population exceeding 400 million, China presents expanding opportunities for global businesses.

Fourth, China-India relations are seen as increasingly important. With bilateral trade reaching a record $155.6 billion in 2025 and both countries playing leadership roles in BRICS, the author expresses confidence in strengthened cooperation and a positive future for bilateral ties.

The full text of the article is as follows:

The Two Sessions, namely the annual plenary sessions of the National People's Congress (NPC) and of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), have always served as a crucial window for observing China. This year's gatherings are particularly noteworthy, as they not only mark the beginning of China's 15th Five-Year Plan but also coincide with a period of turbulent international dynamics and the surging tide of AI.

As a member of the National Committee of CPPCC, I recently returned to China to participate in the Two Sessions. Through fully engaging in the discussions on multiple policies and proposals, I have gained a clearer perspective on the trajectory of China's future development. Thereby, I would like to share with my Indian friends four most impressive signals, along with some reflections arising from them.

The first signal: China's economy takes the initiative to shift gears.

This year's Government Work Report sets China's growth target at 4.5–5%. In the eyes of some observers, this appears to be the lowest growth expectation in nearly four decades, and therefore may seem somewhat "overly conservative." In my view, this target precisely reflects a prudent and pragmatic policy approach against the broader context of China's economic transition. It does not pursue high speed but places greater emphasis on high quality. The underlying logic lies in facilitating an orderly transition between old and new growth drivers, thereby creating greater policy space for structural adjustments, systemic risk prevention and deepening reforms during the 15th Five-Year Plan period. In other words, China's economy is actively transitioning from a phase of high-speed growth to one of high-quality development.

As macro policies continue to take effect and a series of deep-seated reforms are implemented step by step, China's economy is expected to gradually reduce its excessive reliance on investment and exports. A new pattern is set to emerge in which domestic consumption takes the lead, while technological innovation adds impetus. This will enable the economy to sustain reasonable growth while achieving sustainable enhancements in the quality of development.

It is worth noting that this target is also consistent with China's long-term objectives through the year 2035. As outlined at the Fifth Plenary Session of the 19th Central Committee of the Communist Party of China, by 2035, China's per capita GDP is projected to reach the level of a moderately developed country. According to calculations by several economists, this goal can be achieved as long as China's economy maintains an average annual growth rate of above 4.17% over the next decade. Therefore, this year's growth target not only embodies a prudent and rational assessment but also signals confidence in the long-term positive trajectory of China's economy.

The second signal: Smart economy gears up.

In the Government Work Report this year, AI was once again highlighted as a key word. For the first time, the report introduced the concept of "creating new forms of smart economy." The essential goal is to seize the revolutionary opportunities presented by AI, empowering a wide spectrum of industries and fostering new business models and growth drivers.

More specifically, China plans to accelerate the construction of a unified national computing power network, leveraging the advantage of its robust power system. In the future, computing power, like water and electricity, will become a fundamental utility for social operation. It will provide stable and sufficient energy source for AI industry and the wider economic system.

At the same time, China is also accelerating the large-scale application of terminal products such as AI smartphones, AI laptops and intelligent connected vehicles, aiming to bring AI technology into every family as soon as possible. At the industrial level, efforts are being made to promote the deep integration of AI with sectors such as industry, agriculture, education and healthcare through the development of public cloud platforms and the cultivation of high-quality open-source projects, thereby providing new tools for industrial upgrading and social governance.

China is, so to speak, progressing from a "digital economy" to a more sophisticated stage of "smart economy."

The third signal: Opening up continuously expands.

Opening up has always been a vital driving force for China's development. This year's Government Work Report reaffirms that China will encourage foreign enterprises to expand investment and enhance localization, signaling that China's pace of advancing high-standard opening up will not falter.

Currently, China's negative list for foreign investment access has been reduced to 29 items. All market access restrictions on foreign investment in the manufacturing sector have been fully lifted. Looking ahead, the focus of opening up will shift to the services sector, with orderly expansion of market access in areas such as telecommunications, the internet, education, culture and healthcare.

As the world's second-largest import market, China saw its total retail sales of consumer goods surpass 50 trillion yuan (approximately US$7.28 trillion) for the first time in 2025. Consumption of services is also growing rapidly, with per capita consumption expenditure on services accounting for 46.1% of total household spending last year. China's middle-income group—now exceeding 400 million—continues to expand. Such a vast scale of consumption implies a sustained increase in demand for high-quality goods and services, which will generate abundant opportunities for enterprises around the world.

The fourth signal: Prospects for China-India relations are bright.

At this year's Foreign Minister's Press Conference held during the Two Sessions, Foreign Minister Wang Yi took a question on China-India relations from K.J.M. Varma of Press Trust of India. Many media observed that Foreign Minister Wang Yi addressed only four bilateral relationships in separate responses—China-India relations being one of them. This vividly reflects the importance China attaches to the development of its relations with India.

Under the guidance of Chinese and Indian leaders in recent years, our relations have steadily improved, with bilateral trade hitting a record high of $155.6 billion in 2025. As each other's important neighbors and members of the Global South, China and India share not only profound historical and people-to-people ties, but also wide-ranging common interests in development. Spanning thousands of miles and millennia—from ancient civilizational exchanges to contemporary development cooperation—China-India relations have long transcended the bilateral scope. It bears significance not only for the collective rise of the Global South, but also for the stability and development of the world.

China stands ready to work with India to strengthen communication and enhance mutual trust, with development as the biggest common denominator. This year, India holds the BRICS presidency, to be followed by China next year. The two sides can take this opportunity to deepen practical cooperation and strive for more tangible outcomes, jointly writing a new chapter in bilateral relations. I have full confidence in the future of China-India relations.