China's 'two sessions' chart course for high-quality growth

By: Azhar Azam

China's annual "two sessions" — the concurrent meetings of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC) — opened in Beijing last week, setting the stage for the next chapter of the country's development strategy. Having invested heavily in innovation, artificial intelligence and advanced manufacturing, Beijing is now focused on leveraging these technological gains over the coming five years.

This year's gathering carries particular significance. As geopolitical tensions and conflicts weigh on global economic prospects, the policy direction emerging from Beijing underscores China's determination to sustain stable development and reinforce its role as a stabilizing force in the world economy, while accelerating its transition toward innovation-driven, green growth.

At the opening meeting of the NPC, Chinese Premier Li Qiang delivered the government work report, outlining an ambitious yet pragmatic roadmap for China's development in 2026. The report sets a GDP growth target of 4.5-5%, emphasizing a shift toward stable, high-quality development, building on the resilience shown in recent years.

It identifies clear development targets, including a surveyed unemployment rate of around 5.5%, over 12 million new urban jobs and a consumer price index increase of around 2%. Emphasis will be placed on innovative industries such as AI, cutting-edge sectors like quantum technology and next-generation communications, as well as green development, to achieve technological self-reliance and further the low-carbon transition.

The report also commits to proactive fiscal and monetary policies, which are crucial in boosting domestic consumption, strengthening social welfare and fostering inclusive growth. Taken together, these measures signal China’s commitment to quality growth and people-centered progress and cement its role as a responsible and major contributor to global economic growth.

Despite global uncertainty and challenges, China's economy continues to scale new heights. In 2025, the country's economic output topped 140 trillion yuan ($20 trillion), registering 5% growth from the previous year. This expansion translated into tangible social gains, including the creation of roughly 12.7 million urban jobs and the rollout of public well-being initiatives. Efforts to strengthen the social safety net and expand access to health care, education and other essential services promise a development model increasingly focused on improving the quality of people's lives.

At the same time, China's push toward innovation-driven, green development is yielding visible progress across key industrial sectors. In 2025, the output of industrial robots rose 28% and production of new energy vehicles exceeded 16 million units. These advances reflect the rapid modernization of China's manufacturing base, maximizing productivity and further consolidating its role in the global transition toward cleaner, more sustainable mobility.

China's broader energy landscape is changing too. The share of non-fossil energy in total consumption has reached 21.7%, with clean energy accounting for 30.4% of overall energy use. This is definitive evidence of Beijing's steady progress in building a more sustainable and diversified energy system.

Alongside these structural shifts, the production of green technologies continues to expand rapidly. Output of products such as charging piles and solar cells has surged, demonstrating how Beijing's green and low-carbon transformation is simultaneously advancing environmental goals, technological innovation and industrial growth.

Recent assessments support the view that China's current economic strategy places a growing emphasis on strengthening domestic demand through targeted social policy reforms. Elitza Mileva, the World Bank's lead economist for China, recently noted that measures such as higher pension benefits and childcare subsidies would expand social protection and reduce precautionary household savings, exerting a positive impact on household consumption.

Analysts view this approach as signaling "strong continuity" in China's economic management. As China's consumer market expands and upgrades, its scale and purchasing power are expected to drive global demand and generate spillover benefits across the Asia-Pacific. The momentum will be reinforced by expanded digital and green trade, AI and green technology exports and broader free trade partnerships.

At a time when the international economy is navigating a decisive period of geopolitical and technological transformation, a stronger Chinese consumer market can turbocharge the domestic economy and act as a catalyst for deeper regional economic integration, strengthening trade, investment and supply-chain connections with neighboring economies, particularly in Southeast Asia.

Beyond the near-term policy measures, the "two sessions" reaffirm China's strategic vision for development. The draft outline of the 15th Five-Year Plan (2026–2030) highlights Beijing's resolve to anchor future growth in technological innovation, industrial upgrading and greater self-reliance. By pairing a more dynamic consumer market with advances in frontier technologies, China would be better positioned to achieve long-term growth, bolster economic resilience and secure a leading role in emerging industries.

The blueprint marks an evolution in the country's development model. Rather than prioritizing growth speed alone, the new draft plan emphasizes stability, technological sophistication, innovation and consumption. By embedding these priorities across sectors, Chinese policymakers aim to modernize the economy and reduce dependence on traditional growth drivers such as export-led expansion. This strategy — combining a vibrant domestic market with technological leadership — lays the groundwork for a flexible, future-ready economy capable of sustaining high-quality prosperity.

*My article first appeared at China Diplomacy in the New Era

The Middle East is drifting toward rival security blocs

The Middle East is increasingly gravitating toward parallel – and potentially rival – security architectures. Rather than pursuing strategic diversification within a shared regional order, the United Arab Emirates (UAE) and Saudi Arabia are charting divergent paths amid waning U.S. guarantees. The trajectory points not to cohesion but to structural fragmentation in the regional security landscape.

Abu Dhabi’s signing a letter of intent with New Delhi on a Strategic Defense Partnership[i] highlights this shift, underscoring intensifying rivalry between Saudi Arabia and the UAE. Although not a formal defense pact, the arrangement would sharpen regional divisions particularly if Israel is formally embedded in the emerging security network, accelerating the consolidation of the Indo-Abrahamic alliance.

The recalibration unfolded following an October 2023 leaked report that allegedly outlined Abu Dhabi’s plans[ii] to provide support to Israel through a network of military facilities in the Red Sea and the Horn of Africa, including in Yemen, Eritrea and Somalia, against Hamas. The disclosure reinforced the perception of the UAE[iii] as a permissive conduit for Israeli power projection across the Middle East.

The partnership enables New Delhi to sustain strategic presence and influence in the Middle East without entanglement in regional conflicts[iv] and offers Abu Dhabi a pathway to long-term, technology-driven economic growth, anchored in diversified external partnerships. This flexible hedging model contrasts sharply with Riyadh’s security strategy.

Saudi Arabia’s Strategic Mutual Defense Agreement (SMDA) with Pakistan[v] commits the parties to treat aggression against one as aggression against both. While an embryonic framework lacks defined response mechanisms and clear command integration, it signals Riyadh’s preference for formalized deterrence.

Reports of Türkiye’s interest in joining the SMDA[vi] or building a standalone trilateral security alliance[vii] along with Saudi Arabia and Pakistan magnifies the Abu Dhabi’s divergence. If realized, Ankara’s accession – as a NATO member with the alliance’s second-largest military[viii], a rapidly advancing defense industry and expanding military footprint[ix] across the Eastern Mediterranean and the Caucasus – would add substantial operational and strategic weight to the treaty.

Signed in September 2025[x], the SMDA’s formulation echoes NATO’s Article 5 even as it excludes explicit nuclear undertakings or predefined protocols. Still, observers believe that it could evolve into a more formal collective defense structure over time[xi] with subsequent agreements defining the role of deterrence and the scope of collective response. Turkish participation, especially if it catalyzes interest from additional states, would strengthen this perception.

The SMDA’s origins lie in Crown Prince Mohammed bin Salman’s pursuit of greater strategic autonomy[xii], accelerated by U.S. inaction following the 2019 attacks on Saudi oil facilities. Since then, Riyadh has broadened diplomatic engagement with rivals including Iran and explored parallel security arrangements to reduce dependence on America’s protective umbrella.

Israel’s military operations across multiple theaters, including strikes targeting Hamas leadership in Qatar, crystallized anxieties about the reliability of external deterrence. For Gulf states, the concern was Washington’s apparent inability – or unwillingness – to restrain a close ally from trespassing the sovereignty of another U.S. partner, which could have ignited a wider regional conflict.

As Ellie Geranmayeh of the European Council on Foreign Relations anticipated the looming reckoning, “If you are an Arab country that hosts U.S. bases or a NATO member like Türkiye and then a major U.S. ally attacks Qatar, you are going to deeply question that American security umbrella you’ve paid top dollar for.”[xiii]

Similar doubts have surfaced in Europe. Germany’s exploration[xiv] and France’s conditional consideration of extending nuclear deterrence to other European states[xv] last year emphasized growing unease even among core NATO allies. Türkiye’s interest in the SMDA mirrors comparable skepticism.

For Riyadh, the pact enhances leverage over Washington, bolstering resistance to U.S. pressure to normalize relations with Israel[xvi] without tangible progress[xvii] toward a Palestinian state. For economically strained Pakistan, it offers prospects of translating strategic configuration into material gains[xviii] – arms exports, increased Saudi investment and deeper defense-industrial cooperation. Türkiye’s calculus is strategic, aimed at expanding regional influence and diversifying security options beyond NATO.

These shifts have unsettled peripheral actors. In India, the SMDA has drawn close scrutiny from policymakers[xix] and analysts[xx] about its long-term structural implications. The emerging Saudi–Pakistan–Türkiye triad, Indian critics argue[xxi], could reshape power balances across the Middle East and adjacent regions central to India’s energy security, trade routes and strategic interests.

The implications extend into the South Caucasus, a geostrategic corridor linking Europe, the Middle East and Asia. An expanded SMDA would intersect with the existing Azerbaijan-Pakistan-Türkiye political-military axis, complicating India’s efforts to deepen economic and strategic engagement.[xxii]

At the same time, Ankara’s strong ties with Baku and its strengthening relations with Tbilisi could provide Riyadh alternative investment and transit pathways into Central Asia via the Middle Corridor[xxiii], reinforcing the bloc’s strategic coherence beyond the Middle East.

Yet, conflating the multilateral defense alliance with ideological cohesion or strategic revisionism[xxiv] misreads the nature of contemporary alignment. From Saudi-UAE rifts over Yemen and divergent positions on Somaliland’s recognition – Saudi Arabia and Türkiye on one side and the UAE and Israel on the other – to their respective outreach to Pakistan and India reveal that regional geopolitics is driven by economic and strategic interests, not ideological affinity.

Whether the SMDA matures into a broader collective framework or remains limited, Türkiye’s interest reflects an adaptive response to eroding security guarantees. By contrast, the UAE–India partnership embodies a different logic, integrating defense cooperation with trade and technology without binding automatic defense commitments.

These contrasting approaches indicate that the Middle East is entering a period of competitive fragmentation. Saudi Arabia is pursuing a more institutionalized model of deterrence while the UAE’s flexible hedging emphasizes optionality over commitment. With little prospect for coordination between these parallel alignments, they risk calcifying into rival blocs – weakening deterrence, raising the stakes for miscalculation and heightening the likelihood of regional escalation.


[i] Embassy of India, Abdu Dhabi, United Arab Emirates (2025). “India-UAE Bilateral Defence Cooperation”, retrieved from: https://www.indembassyuae.gov.in/defence-relation.php#:~:text=Bilateral%20defence%20cooperation%20between%20India,Defence%20Cooperation%20in%20June%202003.
[ii] Cafiero, G. (2025). “Israel, the UAE, and Yemen’s South: The Politics of Unlikely Alliances”, Arab Center Washington DC, 14 November 2025, retrieved from: https://arabcenterdc.org/resource/israel-the-uae-and-yemens-south-the-politics-of-unlikely-alliances/.
[iii] Middle East Eye (2026). “Prominent Saudi academic accuses UAE of being Israel’s ‘trojan horse’”, Middle East Eye, 23 January 2026, retrieved from: https://www.middleeasteye.net/news/prominent-saudi-academic-accuses-uae-being-israels-trojan-horse.
[iv] Patel, S. and Elimam, A. (2026). “India, UAE sign $3 billion LNG deal, agree to boost trade and defence ties at leaders’ meeting”, Reuters, 19 January 2026, retrieved from: https://www.reuters.com/world/india/india-uae-agree-boost-trade-defence-ties-finalise-lng-deal-leaders-meeting-2026-01-19/.
[v] Saudi Press Agency (2025). “Joint Statement Issued Following Pakistan Prime Minister State Visit to Saudi Arabia”, 25 March 2025, retrieved from: https://www.spa.gov.sa/en/w2399706?
[vi] Hacaoglu, S., Mangi, S. and Kozok, F. (2026). “Turkey Said to Seek Membership of Saudi-Pakistan Defense Pact”, Bloomberg, 9 January 2026, retrieved from: https://www.bloomberg.com/news/articles/2026-01-09/turkey-said-to-seek-membership-of-saudi-pakistan-defense-pact.
[vii] TRT World (2026). “Turkiye, Pakistan, Saudi Arabia defence deal ‘in pipeline’”, 16 January 2026, retrieved from: https://www.trtworld.com/article/0ddf25688812.
[viii] Al Jazeera (2025). “Turkiye’s booming defence industry – a quick look”, 17 March 2025, retrieved from: https://www.aljazeera.com/news/2025/3/17/heres-a-look-at-turkiyes-booming-defence-industry.
[ix] Alhas, A.M. (2025). “Analysis: Turkey pursues deals, bases, training to bolster global military”, BBC Monitoring, 9 May 2025, retrieved from: https://monitoring.bbc.co.uk/product/b0003u88.
[x] Saudi Press Agency (2025). “Joint Statement Issued Following Pakistan Prime Minister State Visit to Saudi Arabia”, 17 September 2025, retrieved from: https://www.spa.gov.sa/en/w2399706?
[xi] Ashtakala, D., Horschig, D. and Schiff, B. (2025). “Could the Pakistani-Saudi Defense Pact Be the First Step Toward a NATO-Style Alliance”, 6 October 2025, retrieved from: https://www.csis.org/analysis/could-pakistani-saudi-defense-pact-be-first-step-toward-nato-style-alliance.
[xii] El Yaakoubi, A. (2023). “Saudi crown prince acts to realign Mideast dynamics amid concern over US support”, Reuters, 4 April 2023, retrieved from: https://www.reuters.com/world/middle-east/saudi-crown-prince-acts-realign-mideast-dynamics-amid-concern-over-us-support-2023-04-03/.
[xiii] Dagher, S. et al. (2025). “Israel’s Qatar Attack Has Gulf Doubting US security Pledge”, Bloomberg, 10 September 2025, retrieved from: https://www.bloomberg.com/news/articles/2025-09-10/israel-s-qatar-attack-has-gulf-questioning-us-security-guarantee.
[xiv] Reuters (2025). “Germany’s Mertz wants European nuclear weapons to boost US shield”, 9 March 2025, retrieved from: https://www.reuters.com/world/europe/germanys-merz-wants-european-nuclear-weapons-boost-us-shield-2025-03-09/.
[xv] Hairsine, K. (2025). “Macron open to deploying French nuclear weapons in Europe”, DW, 14 May 2025, retrieved from: https://www.dw.com/en/macron-open-to-deploying-french-nuclear-weapons-in-europe/a-72534138.
[xvi] MEMO (2025). “Report: Tensions soared during Trump-bin Salman meeting over normalization push”, 26 November 2025, retrieved from: https://www.middleeastmonitor.com/20251126-report-tensions-soared-during-trump-bin-salman-meeting-over-normalisation-push/.
[xvii] Roll Call (2025). “Remarks: Donald Trump Holds a Bilat with Mohammed bin Salman of Saudi Arabia”, retrieved from: https://rollcall.com/factbase/trump/transcript/donald-trump-remarks-bilat-mohammed-bin-salman-saudi-arabia-november-18-2025/.
[xviii] Shahid, A. and Sayeed, S. (2026). “Exclusive: Pakistan, Saudi in talks on JF-17 jets-for-loans deal, sources say”, Reuters, 8 January 2026, retrieved from: https://www.reuters.com/world/asia-pacific/pakistan-saudi-talks-jf-17-jets-for-loans-deal-sources-say-2026-01-07/.
[xix] Vaish, A. (2025). “India Says ‘Will Study Implications’ Of Pakistan-Saudi Arabia Defence Deal”, Outlook, 18 September 2025, retrieved from: https://www.outlookindia.com/national/india-says-will-study-implications-of-pakistan-saudi-arabia-defence-deal.[xx] Pandya, A. (2025). “Could Saudi-Pakistan Defense Cooperation Spark War with India?”, Middle East Forum, 22 October 2025, retrieved from: https://www.meforum.org/mef-observer/could-saudi-pakistan-defense-cooperation-spark-war-with-india.
[xxi] India Today (2026). “Turkey in talks to join Pakistan-Saudi Muslim Nato. Should India be concerned?”, 13 January 2026, retrieved from: https://www.indiatoday.in/world/story/pakistan-news-turkey-in-talks-to-join-pak-saudi-nato-like-defence-deal-should-india-be-worried-bloomberg-2851070-2026-01-13.
[xxii] Chalikyan, N. (2025). “India and the South Caucasus: Infrastructure, Arms, and Geopolitical Competition”, ORF America, 16 October 2025, retrieved from: https://orfamerica.org/newresearch/india-and-the-south-caucasus-infrastructure-arms-and-geopolitical-competition.
[xxiii] Amwaj Media (2025). “The burgeoning Gulf Arab footprint in the South Caucasus”, 21 March 2025, retrieved from: https://amwaj.media/en/article/the-burgeoning-gulf-arab-footprint-in-the-south-caucasus.
[xxiv] Restelli, S. (2026). “Two Security Architectures, One Region: Why the India-UAE-Israel Axis Matters”, 20 January 2026, retrieved from: https://blogs.timesofisrael.com/two-security-architectures-one-region-why-the-india-uae-israel-axis-matters/.

*My article first appeared at Manara Magazine/Cambridge Middle East and North Africa Forum

Merz's visit to set a positive tone for future Sino-German relations

By: Azhar  Azam

German Chancellor Friedrich Merz said he would seek "strategic partnerships" and pursue future cooperation with Beijing during his China visit, which begins on Wednesday. Against the backdrop of rising protectionism, his comments reflect Berlin's intent to reinforce pragmatic collaboration in trade, investment and manufacturing with Beijing through renewed high-level exchanges and intensified business engagement.

Asked whether concrete outcomes were expected, German Foreign Minister Johann Wadephul earlier confirmed, "Yes, they can, and in all likelihood they will." He noted that Beijing had approved the export applications for some German companies, reaffirming China as one of Germany's most important trading partner.

Merz is bringing an unusually large business delegation including chief executives from leading firms such as Bayer, Volkswagen and Siemens. With around 30 senior corporate leaders accompanying him and with interest far exceeding available places, the trip has attracted significant attention from not only China and Germany, but also the international community.

Since the establishment of diplomatic ties in 1972, Sino-German relations have navigated periods of tensions that have evolved into a robust economic relationship. Despite differences, both countries share interests in boosting trade and investment, supporting the international economy and addressing global challenges such as climate change and public health.

Among Berlin's major demands from Beijing are increased market access for its companies and products. China has already signaled receptiveness to deeper commercial engagement. At a roundtable for German-invested enterprises on February 12, Chinese officials encouraged German firms to invest in innovation, green development and the digital sector, pledging a fair and stable business environment.

For Germany, China remains a vital market and an attractive investment destination. German corporate investment in China reached a four-year high in 2025, and firms themselves credit China-based technologies and products with strengthening their global presence and competitiveness. This demonstrates commitment to elevate business ties and sustain advanced-manufacturing linkages.

Economic fundamentals highlight the depth of the relationship. China was Germany's largest trading partner from 2016 to 2023. After the US briefly overtook it in 2024, Beijing regained the top position in 2025, with bilateral trade reaching 251.8 billion euros (around $296.66 billion), according to the German Federal Statistical Office (Destatis).

Some frame Germany's economic ties with China as a source of dependence; they are reciprocal and historically rooted. Decades of investment, trade and technological cooperation have produced structurally embedded interlinkages that benefit both sides. The priority shouldn't be asymmetric dependence but mutual interdependence.

Merz's outreach to China carries wider geopolitical significance. Amid intensifying global trade frictions and attempts to undermine a coordinated response to climate change, disease surveillance and pandemic preparedness, Berlin's stance on tariffs, support for multilateral institutions and emphasis on free trade align with Beijing's.

At the Munich Security Conference, the German Chancellor himself warned against unilateralism. "We do not believe in tariffs and protectionism, but in free trade. We stand by climate agreements and the World Health Organization." As protectionist impulses and efforts to weaken institutions threaten global cohesion, closer China-Germany coordination becomes crucial to safeguard multilateralism, open trade and collective action on climate and global health.

As Wadephul, who recently met with his Chinese and French counterparts Wang Yi and Jean-Noel Barrot, stressed: Germany and France should increase communication with China to dispel misunderstandings and consolidate mutual trust. Such engagements could advance strategic dialogue, strengthen the UN-centered international system, improve global governance and support each other's development.

At the European Industry Summit, Merz hailed China's industrial speed and implementation capacity in rolling out large renewable-energy projects as a benchmark for Europe. By partnering with Beijing, Berlin and Brussels can accelerate their green transition, scale innovation and boost competitiveness – three pillars of Europe's industrial renewal amid a protectionist, anti-green administration in Washington.

Building on recent diplomatic exchanges and strong complementarities between Europe's largest industrial economy and the world's leading manufacturing and innovation hub, Merz's China visit is expected to yield concrete results. Possible outcomes include a more predictable market environment, collaboration in innovation, green industries, the digital sector, advanced manufacturing, automotive and chemicals.

Germany's long-standing engagement with China provides a solid foundation. For two decades, German firms have thrived on China's demand – particularly in the automotive, machinery and chemical industries – creating a win-win scenario that allowed them to weather shocks better than their peers.

The momentum hasn't faded. Still, roughly all German companies in China are optimistic about their future outlook, with half intending to increase investment in metal products, automotive, electronic, chemicals and logistics.

As US tariffs weigh on German firms and pivot toward the Chinese market, Beijing is extending robust policy support. During the 2026-2030 Five-Year Plan period, China aims to expand high-quality opening-up and development, generating significant opportunities for German exporters. Germany's parallel efforts to ensure an equitable business environment for Chinese companies would promise a more resilient Beijing-Berlin economic and trade partnership.

Looking ahead, this leadership-level engagement is poised to set a constructive tone for the future of Beijing-Berlin relations. The world's second and third-largest economies share strong economic and political interconnections and a common stake in global stability.

When combined with China's high-quality demand, technological innovation and industrial capacity, Germany's drive for trade expansion, competitiveness and resilient supply chains could help revitalize its economy and sustain a mutually beneficial partnership for decades to come.

*My article first appeared in CGTN