China looks to grow economy ‘around 5%’ in 2025

China’s government has set a GDP growth target at ‘around 5%’ this year, the same as last year’s, with stimulating domestic demand by introducing more supportive policies a priority, according to the recently released Government Work Report released.

Premier Li Qiang, who delivered the report at the opening of the third session of the 14th National People’s Congress in Beijing, said that a target of around 5% aligns with the country’s mid-term and long-term development goals and underscores the resolve to meet difficulties head-on and strive hard to deliver.

Li said China will pursue a more proactive fiscal policy and exercise a moderately loose monetary policy this year, with the projected deficit-to-GDP ratio set at 4% for 2025, up from 3% last year, according to the report, which has been submitted to the country’s top legislature for deliberation.

The Work Report also said China – the world’s second-largest economy – will issue 1.3 trillion yuan ($178.95 billion) in ultra-long-term special treasury bonds this year, up from 1 trillion yuan for 2024. Additionally, 500 billion yuan of special treasury bonds will be issued to support large State-owned commercial banks in replenishing capital.

According to the report, China will also target an increase in the consumer price index, a main gauge of inflation, around 2%, aimed at better balancing supply and demand through a combination of policies and reform measures so that the general price level will stay within an appropriate range.

This target is down from around 3% for 2024 and marks the first time that the target was set below 3% since China started specifying the figure in the Government Work Report in 2005.

Meanwhile, China aims to create more than 12 million urban jobs this year, and keep the surveyed urban unemployment rate at around 5.5%.

To encourage foreign investment, the report said the country will open internet-related, cultural and other sectors in a well-regulated way and expand trials to open sectors such as telecommunications, medical services and education, while effectively protecting the lawful rights and interests of private enterprises and entrepreneurs in accordance with the law.

Tian Xuan, a deputy to the 14th NPC and head of the National Institute of Financial Research, Tsinghua University, said the GDP growth target of “around 5%” reflects the continuity and consistency of policies and is a goal that “we need to strive for and reach with extra effort, which can effectively inspire all people across the country to work hard together”.

Janice Hu, China country head at UBS AG and chairperson of UBS Securities, said that the government is expected to prioritize “stabilizing growth” as the central task this year, emphasizing boosting domestic demand with more supportive macro policies.

“These much-anticipated measures could gradually help underpin household confidence and unleash consumption potential in the long run,” Hu said, adding that UBS will continue to invest strategically in China.

Exports grow 7.1% in 2024

China’s exports to over 160 countries and regions saw growth in 2024, according to the General Administration of Customs.

The country’s exports grew 7.1% year-on-year, reaching 25.45 trillion yuan ($3.55 trillion) last year, marking the eighth consecutive year of growth, according to the latest data released by the GAC.

Exports to Brazil, the United Arab Emirates and Saudi Arabia increased by 23.3%, 19.2% and 18.2% respectively year-on-year. Exports to ASEAN countries and nations participating in the Belt and Road Initiative grew by 13.4% and 9.6% respectively. Meanwhile, exports to traditional markets, such as the European Union and the United States, rose by 4.3% and 6.1% respectively.

Lyu Daliang, a GAC official, said that despite growing uncertainties and challenges, China’s exports – characterized by a wide range of products – are expected to remain resilient and dynamic, supported by both incremental and existing policies.