China’s expected GDP growth target for 2025 is about 5%

The Chinese Premier proposed in the government work report on the 5th that the main expected development goals this year are: GDP growth of about 5%; urban survey unemployment rate of about 5.5%, more than 12 million new urban jobs; resident price increase of about 2%; resident income growth synchronized with economic growth; international balance of payments maintained in a basic balance; grain output of about 1.4 trillion jin; unit GDP energy consumption reduced by about 3%, and ecological environment quality continued to improve.

Premier Li Qiang announced in the government work report that the actual economic growth target for 2025 is still set at “about 5%”, maintaining this level for three consecutive years.

Against the backdrop of increasing unfavorable factors such as the Trump administration’s tariff increase in the United States, the Chinese government plans to expand fiscal spending to support economic growth. To this end, 500 billion yuan of treasury bonds will be issued to inject public funds into large state-owned banks to prevent financial risks brought about by the long-term downturn in the real estate market.

In the report, Li Qiang said that a proactive fiscal policy will be implemented to expand domestic demand and increase the deficit ratio to about 4.0%, higher than the 3.0% set in 2024.

In addition, the government will increase the issuance of special treasury bonds that are not included in the fiscal deficit. Among them, ultra-long-term treasury bonds (with a term of more than 10 years) will be issued by 1.3 trillion yuan, an increase of 300 billion yuan from 2024.

At the same time, the government plans to use 500 billion yuan of special treasury bonds to raise funds to inject capital into large state-owned banks to enhance the stability of the financial system and cope with the risk of deteriorating operations due to the sluggish real estate market. This move can also ease the squeeze on bank profits by monetary easing policies.

The issuance quota of local government special bonds will also be expanded, set at 4.4 trillion yuan in 2025, an increase of 500 billion yuan from the previous year. These funds are mainly used for investment in construction, land acquisition and acquisition of existing commercial housing, as well as to digest the arrears of local governments to corporate accounts. Promote its transformation into affordable housing for middle- and low-income people and improve the real estate market situation.

In terms of fiscal policy, the Chinese government plans to adopt a “moderately loose” monetary policy to support economic growth, suggesting that the reserve requirement ratio and policy interest rate will be lowered in due course.

In terms of employment, the government set the urban survey unemployment rate at around 5.5% and the number of new urban jobs at more than 12 million, which is the same as the previous year’s target.

On the other hand, the target for the increase in the consumer price index (CPI) is set at around 2%, lower than the 3% set for 2024, reflecting the reality that insufficient domestic demand has led to increased deflationary pressure.

In addition, the government also plans to increase support for medical, elderly care, childcare and other services. China faces structural problems such as population decline, and the key to improving consumer confidence lies in eliminating people’s concerns about the future.

In terms of foreign policy, Li Qiang emphasized that China opposes any form of unilateralism and protectionism, pointing the finger at the United States, which is inclined to tariff policies. On March 4, China announced that as a countermeasure to the new round of tariff measures by the United States, it would impose tariffs of up to 15% on wheat and other products imported from the United States.