Reincarnation struggle begins as demure government gathering ends
Two Sessions takeaways, the next Dalai Lama, AI, robots, flying cars, and tariffs
This is The China Week, a succinct roundup of what happened in the world’s other superpower in the last seven days.
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Two Sessions closes with emphasis on economic and political stability
China's annual political gathering—the Two Sessions—closed today after a week and a half of drama-free assurances from the government on China’s future. These are the key signals from various reports and speeches:
GDP and stimulus
This year’s GDP growth target is around 5%.
The budget deficit target for the year is 4% of GDP, up from 3% in 2024, and the highest since 2010. Analysts say a slowing economy and the threat of Trump tariffs are forcing Beijing to open the purse strings.
Premier Li Qiang 李强 mentioned “consumption” a record 32 times, according to The Economist, but the rhetoric has not been matched by “by policy firepower” according to economists cited by Reuters.
Private companies, tech, real estate
Policy support for private enterprise and the tech industry will continue, and Beijing undertakes to end shakedowns of private companies.
The tech sectors mentioned most frequently included AI, embodied AI (i.e. robots), the low altitude economy (drones, flying cars and economic activity in airspace below 1,000m), biomanufacturing, quantum computing, and 6G.
Some new measures to prop up the ailing real estate sector were announced.
Foreign policy
Beijing promises to be an island of stability in a chaotic world, that it will not be provoked or threatened, that it will encourage Global South cooperation and development, with a special emphasis on Africa which Foreign Minister Wang Yi 王毅 called “the land of hope for the 21st century.”
Proposals that trended online
What’s On Weibo has compiled a guide to proposals from delegates to the Two Sessions that were subjects of intense discussion on social media. These include:
Integrating sexual assault prevention into school curricula and addressing “involution” or the high pressures on Chinese students.
Banning age discrimination in employment.
Strengthening governance over AI deepfakes and voice cloning, and addressing the impact of short videos on children's attention spans.
Source documents:
Beijing Scroll: Full-text and highlights of Government Work Report
Pekingnology: 2025 Govt Work Report, Budget Report, NDRC Report, etc.
Geopolitics: Full transcript of Foreign Minister Wang Yi's Press Conference, with Tech Policy and Trade Policy highlighted
Tibet
Dalai Lama reincarnation struggle begins
Tibetan protesters in New Delhi, India, and in Dharamshala, the seat of the exiled Tibetan government and home of the Dalai Lama, marked the the 66th anniversary of their uprising against China.
Meanwhile, the Dalai Lama has published a new book in which he says that will be reincarnated outside China. He calls on the Tibetan people to reject any successor chosen by Beijing. This caught the attention of China’s Foreign Ministry, whose spokesperson today rejected the Dalai Lama’s views and said he had no right to represent the Tibetan people.
For more on the coming succession struggle, see scholar Robert Barnett: The Tibetan Government-in-Exile Has a New Strategy.
Business, trends, economy
Deflation
China's consumer price index fell at the sharpest pace in 13 months in February. Reuters attributed this to the end of holiday season demand and households remaining “cautious about spending amid job and income worries,” and persistent producer price deflation.
New technology
New AI agent, robots, flying and self-driving cars
It’s not just talk at the Two Sessions when it comes to China’s growing prowess and manufacturing ability in AI, robots, smart cars, and the low altitude economy. Here are some of the important developments from the last week:
AI
A Wuhan-based company called Monica released Manus, which it claims is the world’s first general-purpose AI agent. For details and commentary, see Rui Ma, Recode China AI, and China Talk.
Robots
Last week at the Mobile World Congress in Barcelona, Chinese firms including Unitree and Leju Robot showed off humanoid robots. Here is a roundup of the state of the robot industry in China from research firm Baiguan.
Flying cars
Chinese automotive group Zhejiang Wanfeng Auto Wheel acquired insolvent German flying car developer Volocopter for just over $10 million. Volocopter has been developing and testing electric vertical takeoff and landing (eTVOL) aircraft since 2011: see video of recent flight at Versailles in France.
Self-driving cars
Last week “Geely unveiled G-Pilot—an ambitious program to equip advanced autonomous driving capabilities across a wide range” of electric and other new energy cars, reports Trivium.
This comes about a month after electric car giant BYD announced that it would install its self-driving tech branded “God's Eye” in even its cheapest models like the Seagull which retails for under $10,000.
The Trump show
The trade wars are on
Donald Trump may meet Xi Jinping in China as soon as April, according to the South China Morning Post, or in June, according to the Wall Street Journal.
They have a lot to talk about: Talks between the U.S. and China on trade “are stuck at lower levels,” according to Bloomberg, and China’s retaliation against new Trump tariffs went into effect yesterday March 10. These include an additional 15% taxes on American farm products, including chicken, pork, soybeans, and beef.
Meanwhile, on March 8, Beijing announced a 100% tariff on rapeseed oil, oilcake, and peas from Canada and a 25% tariff on aquatic products and pork. State media said this followed an investigation into Canadian tariffs on Chinese EVs, and steel and aluminum products” and that it was also important “for China to send the message…that if any nations try to gain U.S. favor by imposing extra tariffs on China in return for the U.S. to lift tariffs on them, then China will also use tools to defend its own interests.”