Prime Highlights:
China sets a 2025 GDP growth target of around 5% amidst economic challenges.
The budget deficit target is raised to around 4% of GDP, the highest since 2010.
The consumer price inflation target is lowered to around 2% for 2025, the lowest in over two decades.
Key Background:
China has set its GDP growth target for 2025 at “around 5%,” alongside a series of stimulus measures to support its economy, which is facing mounting trade tensions with the U.S. and sluggish domestic demand. The announcement was made during the annual meeting of the country’s top legislative body, the National People’s Congress.
In an effort to support economic recovery, Beijing increased its budget deficit target to “around 4%” of GDP, up from 3% last year. This marks the highest deficit since 2010, with the previous record being 3.6% in 2020. The government also plans to issue 1.3 trillion yuan ($178.9 billion) in ultra-long-term special treasury bonds in 2025, 300 billion yuan more than last year. Additionally, it will issue 4.4 trillion yuan in local government bonds to help address financing challenges faced by local governments.
Amid low inflation rates, the government has revised its consumer price inflation target to “around 2%,” the lowest in more than 20 years, reflecting concerns over weak domestic demand. The country’s consumer price index grew by only 0.2% in 2024, signaling subdued economic activity.
Furthermore, China has expressed concerns over escalating trade disputes with the U.S., which have led to fresh tariffs and retaliatory measures. In response, Beijing vowed to continue pursuing dialogue and cooperation with the U.S. while also defending its sovereignty and development interests.
China’s economic slowdown, characterized by weak retail sales and real estate investments, has prompted many experts to question whether the 5% growth target is achievable. Despite these challenges, Beijing’s leadership emphasized the importance of boosting domestic consumption and stabilizing the economy through targeted fiscal measures.
