China leaders vow to meet ambitious 5% growth target for 2025 despite global challenges

China’s economic leaders have reaffirmed their commitment to achieving a five percent growth target for 2025, despite rising global trade tensions and scepticism from analysts. This ambitious goal, outlined during the National People’s Congress, follows a similar target set last year, which some experts believe was met only due to exceptional export figures.

The annual “work report” from the Communist Party politburo underscored domestic demand as a key driver of growth for 2025. Alongside this commitment, the inflation target has been reduced to two percent from three percent, and the deficit forecast widened from three percent to four percent of GDP. These adjustments are seen as part of a broader strategy to manage increasing local government debt while maintaining economic momentum.

China’s central bank governor, Pan Gongsheng, has pledged to inject additional liquidity into the financial system and lower interest rates at an appropriate time. These measures are intended to support industries identified as key growth engines, including artificial intelligence, robotics, and green engineering.

Commerce Minister Wang Wentao has responded to growing pressures from countries such as the United States, which have implemented significant tariffs on Chinese imports. Speaking in firm terms, Wang stated that China would respond decisively to any trade conflict while reiterating the need to bolster domestic consumption as part of a long-term strategy to shift away from export-driven growth.

Government plans to increase consumer spending include expanding a “trade-in” programme encouraging the replacement of old consumer durables with new purchases. Additionally, efforts are being made to attract foreign tourism, an industry that has yet to recover fully from the pandemic and accompanying lockdowns.

This recalibration of China’s economic approach highlights the complex balancing act Beijing faces amidst rising global tensions, subdued domestic demand, and the need for sustainable economic reforms. The leadership’s focus on innovation and internal market mechanisms suggests a forward-looking plan to navigate these challenges effectively.