Each year, China’s annual two sessions — the meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference National Committee — offer a rare window into the policy thinking of the world’s second-largest economy.

The 2026 gathering, held in Beijing early this month, signaled an important turning point. Rather than simply doubling down on the infrastructure-heavy growth model that fueled China’s extraordinary rise over the past four decades, the country appears to be charting a more nuanced strategy — one that combines technological innovation with a greater emphasis on improving people’s daily lives.

At first glance, the headline economic target appears modest. Premier Li Qiang set a growth goal of 4.5 to 5 percent for 2026. Yet this target actually reflects realism rather than weakness. After decades of breakneck expansion, the Chinese economy is now navigating a more complex stage where quality, sustainability, and technological leadership matter more than sheer growth speed.

China’s 15th Five-Year Plan (2026-30) places advanced technologies such as artificial intelligence, humanoid robotics, and green energy at the center of its long-term development strategy. Beijing views AI, in the words of analyst Alexander Brown of the Mercator Institute for China Studies, as “an essential tool” to turbocharge its industrial and high-tech ambitions.

This emphasis on innovation is not merely about industrial competition. It is increasingly tied to the noble goal of improving the quality of life of ordinary citizens.

China’s lawmakers and policy advisers are focusing on ways technology can directly benefit people’s welfare, especially in healthcare. AI, big data and advanced materials are being explored as tools to improve diagnostics, treatment efficiency and the overall accessibility of medical services. For example, AI-powered imaging tools are already being piloted in leading hospitals to detect early-stage cancers with greater accuracy than the human eye, promising to democratize access to top-tier diagnostic expertise for patients in smaller cities.

If implemented effectively, such innovations could dramatically transform healthcare in a country of 1.4 billion people — making medical services faster, smarter and more affordable. In this sense, technology becomes not only an engine of economic growth but also a real social equalizer.

Yet China’s leadership appears to recognize that technological dynamism alone cannot sustain long-term prosperity. Equally crucial is a stronger consumer economy — the second point of the development triangle.

For decades, China’s past economic growth model relied heavily on exports, manufacturing, and large-scale infrastructure investment. But policymakers are now experimenting with a different approach — encouraging households to spend more and strengthening domestic demand. According to latest official data, household consumption currently accounts for only about 40 percent of China’s GDP, far below the global average of roughly 55 percent. Increasing that share could help rebalance the economy, making growth more resilient and sustainable. The logic is straightforward: If Chinese citizens feel less pressure to save for medical bills or their children’s education, they will be more confident in spending their income.

This brings us to the third point of the triangle: As in any other society, without the strong enough security provided by social welfare, the goal of boosting consumption will remain elusive. Officials have begun promoting policies described as “investing in people”. These include expanding elderly services, supporting families raising children, and encouraging paid annual leave — measures designed to make households feel more financially secure and therefore more willing to spend.

I believe this flexibility could make the Chinese economy stronger and more dynamic.

For observers around the world, the message from Beijing is clear: The next phase of China’s development will not simply be about building more infrastructure — it will increasingly be about building better lives. And as far as the world is concerned, a China that successfully navigates this transition won’t just be a stronger major economy, but a more stable and predictable partner when it comes to addressing shared global challenges

Of course, this important transition will not be easy. China faces some structural challenges — a prolonged property downturn, youth unemployment concerns, and demographic pressures from declining birth rates. Real estate alone once accounted for roughly a quarter of economic activity when related industries were included. Skeptics might argue that “investing in people” is easier said than done when local government finances are somewhat strained by the property downturn. The success of this pivot, therefore, hinges not just on vision, but on the difficult work of fiscal reform.

These difficulties, however, seem to be pushing policymakers toward a healthier economic balance. This pivot creates inherent tensions. How will the government balance its desire for technological innovation with the need for decentralized experimentation? And can “investing in people” lead to reforms in the hukou (household registration) system that limits access to public services for migrant workers? The good news about Chinese society is its constant flux and tradition of continuous reform.

At the heart of the emerging development strategy lies a three-pillar approach — technological innovation, stronger domestic consumption, and improved social welfare. Together, these elements could produce a more resilient and sustainable economic growth model — one less dependent on construction booms and external demand.

Equally notable is China’s message on the international stage. Foreign Minister Wang Yi emphasized the importance of cooperation with both Europe and the United States, suggesting that “if both sides treat each other with respect and sincerity, the list of problems will get shorter and the one of cooperation will grow longer”. In an era marked by geopolitical tensions and economic fragmentation, such signals matter.

The broader lesson from the two sessions is that China is attempting something difficult yet vitally important — transforming an economy once powered by factories, exports, and massive infrastructure into one driven by innovation, consumption and human welfare.

No transition of such a large scale and bold vision happens overnight. But if Beijing succeeds in aligning technological breakthroughs with better social security and household confidence, it could shape not only China’s long-term future but also the trajectory of the global economy.

This leads me to express my deep confidence in both the science-driven, wise, strategic and strong-willed patriotic leaders guiding this transformation, as well as the innate genius, perseverance, Confucian work ethic and bold, continuous innovative spirit of the Chinese people. Together, these qualities form an unstoppable force capable of achieving even the most arduous and historic epic structural reforms.

For observers around the world, the message from Beijing is clear: The next phase of China’s development will not simply be about building more infrastructure — it will increasingly be about building better lives. And as far as the world is concerned, a China that successfully navigates this transition won’t just be a stronger major economy, but a more stable and predictable partner when it comes to addressing shared global challenges.

The author is an economics and politics analyst, multi-awarded columnist of Philippine Star and Abante newspapers, book author and moderator of the Pandesal Forum.

The views do not necessarily reflect those of China Daily.