As China’s annual “Two Sessions” meetings draw to a close in Beijing, the message from the leadership is one of controlled ambition: slower but steadier growth, deeper technological self-reliance, a fresh five-year development blueprint and a renewed insistence that China wants to remain open to trade and investment. For Europe, the question is not whether China matters in 2026 — it plainly does — but whether the policies endorsed this month make cooperation easier, or simply redefine the terms of competition.
The 2026 “Two Sessions” — the annual meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) — ended on 12 March with the formal approval of the Government Work Report and the 15th Five-Year Plan for 2026-2030. Those documents matter because they are not merely rhetorical. They set the political and economic direction for the world’s second-largest economy, and they give governments, investors and trading partners a clear sense of Beijing’s priorities. This year, the priorities are unmistakable: resilience, innovation, domestic demand, green transition and a more selective, more strategic form of openness.
Beijing set a 2026 GDP growth target of 4.5% to 5%, a notable shift from the “around 5%” language of recent years. The change is significant. It suggests the leadership is acknowledging a more difficult external environment while trying to preserve room for manoeuvre at home. Chinese officials paired that target with a more supportive macroeconomic stance, including record fiscal expenditure, heavy infrastructure spending and targeted support for consumption. Senior officials said total investment in infrastructure, public services and other key areas is expected to exceed 7 trillion yuan this year, while special treasury bonds will help support both consumer demand and strategic development.
For Europe, however, the headline is not simply China’s growth target. It is the kind of growth Beijing wants. The 15th Five-Year Plan projects at least 7% average annual growth in national R&D spending from 2026 to 2030, raises the target for the value added of core digital economy industries to 12.5% of GDP, and envisages a 17% reduction in carbon dioxide emissions per unit of GDP over the same period. Beijing also says it will launch 109 major projects across six broad areas. In plain terms, China is doubling down on advanced manufacturing, digital industry, green transformation and strategic technologies. Europe will see opportunity in that — but also sharper competitive pressure.
That duality runs through almost every China-EU conversation today. On the one hand, China is explicitly signalling wider opening-up. The Government Work Report says Beijing will expand market access, especially in services, and broaden pilot openings in value-added telecoms, biotechnology and wholly foreign-owned hospitals. It also says China will take “well-ordered steps” to open the digital sector and shorten the negative list for cross-border trade in services. For European companies, particularly in healthcare, business services, digital applications, high-end manufacturing and environmental technology, those signals will be carefully studied.
On foreign investment, the language was equally direct. China says it will deepen reform of the institutional framework for promoting foreign investment, continuously optimise the foreign investment environment, improve services and support for foreign investors, and steer foreign capital into advanced manufacturing, modern services, high technology, energy conservation and environmental protection. These are all areas in which Europe has strong commercial and industrial interests. If implemented in practice, the measures could offer real openings for European firms in sectors where China still needs know-how, capital or global credibility.
There was also a notable trade message aimed squarely at overseas partners. Beijing said it would boost imports in 2026 to promote more balanced trade, and the five-year plan language stresses better coordination between imports and exports, goods and services trade, and inward and outward investment. Chinese officials later reinforced that line, saying China wants to stabilise exports while sharing more opportunities through its domestic market. For Europe — which has long complained about imbalances, uneven market access and the difficulty of converting China’s vast demand into fair commercial opportunity — that is an important political signal. The real test, of course, will be implementation.
Chinese foreign minister Wang Yi used the Two Sessions platform to send an unmistakable political message to Europe as well. He said ties with European countries had been “regaining strength” since last year, noted that two-way trade had topped US$1 trillion, and argued that Europe is a “key partner” for China’s modernisation. He insisted that China and Europe are economically complementary and warned that “building walls and barriers will only lead to self-isolation.” That is classic Beijing language, but it is also a reminder that China sees Europe as strategically important at a time of turbulence in global trade and geopolitics.
Yet Europe will not read the Two Sessions through Beijing’s preferred lens alone. The relationship enters 2026 in what some analysts describe as a phase of cautious engagement rather than reset. Trade and diplomatic channels are functioning, but structural disputes remain. Concerns over Chinese industrial overcapacity, economic coercion, market distortions and China’s alignment with Russia have not gone away. Nor has Europe forgotten the shock of China’s 2025 rare earth export restrictions, which exposed deep vulnerabilities in EU supply chains for the automotive, energy, defence and digital sectors. An official European Parliament research note published in November 2025 said the EU sources all of its heavy rare earths, 85% of its light rare earths, and 98% of its rare earth magnets from China.
That is why the “open for business” message from Beijing will be welcomed in some European boardrooms, but treated with caution in Brussels. Europe’s business community will note the service-sector openings, investment language and import pledges. Policymakers, by contrast, will ask whether China’s accelerated push into semiconductors, aerospace, biotech, AI, clean tech and advanced industry will intensify competitive pressure on Europe’s industrial base. They will also ask whether greater openness in selected sectors is being matched by a broader levelling of the playing field — including procurement, subsidies, data governance and regulatory treatment. The Two Sessions gave Europe more reasons to engage, but not fewer reasons to hedge.
The environmental agenda is one area where the potential for cooperation remains substantial. During the closing session, lawmakers approved a new Ecological and Environmental Code, consolidating and updating China’s environmental law architecture. Together with the five-year plan’s carbon-intensity target and the broader emphasis on green transition, that points to a policy environment in which climate, energy efficiency, pollution control and green finance will remain important. For Europe, which still sees climate as one of the few areas where strategic cooperation with China can produce global dividends, this is one of the more constructive outcomes of the meetings.
But the Two Sessions also reminded Europe that China’s political trajectory remains difficult for many in the EU to ignore. The NPC adopted a new ethnic unity and progress law, presented by Chinese authorities as strengthening national cohesion but criticised by international observers as entrenching assimilationist policies, especially in minority regions. That matters for Europe not because it changes trade flows overnight, but because values, human rights and political trust continue to shape the wider climate of China-EU relations. Economic pragmatism may create space for engagement, but it does not erase the political frictions that have accumulated over recent years.
So what should Europe take from the close of this year’s Two Sessions?
First, China is signalling that it wants a stable external economic environment while it restructures its own model around technology, domestic demand and high-quality growth. Second, Beijing is plainly trying to reassure foreign business — including European business — that it still values investment, imports and practical cooperation. Third, the same policies that create openings for European companies will also sharpen Europe’s debate about economic security, industrial protection and strategic dependency.
For the EU, the right response is neither naïve optimism nor reflexive hostility. Europe should test China’s new opening-up promises sector by sector, push hard on reciprocity, keep diversifying critical supply chains and continue defending its own industrial and technological base. At the same time, it should not close the door to cooperation where interests align — particularly in climate, green technology, healthcare, services and carefully structured investment. China’s Two Sessions have not transformed the relationship. But they have clarified the next phase of it: more engagement, more competition, and more pressure on both sides to decide whether coexistence can be made durable.
In that sense, Beijing’s message to Europe is simple: China is still open, but it expects to set the tempo. Europe now has to decide whether it wants merely to react — or to shape the terms of the relationship with equal strategic confidence.
