With China targeting an economic growth rate of around 5% for 2025, experts are focusing on strategies like boosting consumer spending, fostering high-tech industries, and supporting healthcare sectors to maintain momentum in the world’s second-largest economy.
During the two sessions that concluded recently, national lawmakers and advisors expressed confidence in achieving the country’s socio-economic goals for the year. The year 2025 is critical as it marks the final year of China’s 14th Five-Year Plan (2021-25), laying the groundwork for the next plan.
The Government Work Report unveiled key objectives, including a deficit-to-GDP ratio of 4%, a target urban unemployment rate of 5.5%, and the creation of over 12 million urban jobs. Consumer price index growth is expected to stay around 2%.
Economists predict that 2025 policies will emphasize stimulating domestic consumption, advancing large-scale projects, supporting private enterprise, enhancing high-tech sectors, and balancing fiscal and monetary measures. These efforts seek to mitigate risks and maintain economic stability.
Focus on Consumption
Zhang Jianping from the Chinese Academy of International Trade and Economic Cooperation anticipates increased government efforts to expand consumer spending and investment. Key infrastructure projects will be fast-tracked, encouraging private-sector involvement, while real estate firms may gain improved access to loans.
Trade-in programs for durable goods, including home appliances, are expected to drive significant sales growth. Ultra-long treasury bonds worth 300 billion yuan ($41.31 billion) will fund these programs, doubling last year’s allocation.
Economist Cao Heping of Peking University noted that fiscal funds might flow through banking institutions in the first quarter to boost local-level policy coordination. Dong Shaopeng from Renmin University highlighted the importance of upgrading equipment, expanding trade-in initiatives, and promoting spending in tourism, technology, healthcare, and eldercare.
Efforts to stabilize real estate and stock markets will also aim to preserve household wealth and encourage investment from state-owned and private companies. Experts agree that there’s room for monetary policies to further support fiscal actions.
China Advancing Technology
The Government Work Report emphasizes the role of technology in driving growth, with innovation as a key priority. Experts point to advancements in artificial intelligence (AI), robotics, and other emerging technologies as significant opportunities for economic growth.
Deep learning models, such as AI chatbots, are integrating into sectors like healthcare and education, creating new investment opportunities. The government plans to fund industries of the future, including biomanufacturing, quantum technology, and AI-powered advancements. Large-scale applications of new technologies are also a priority.
Major companies are responding with significant investments. Alibaba, for example, plans to invest 380 billion yuan in cloud computing and AI infrastructure over three years.
Addressing Public Needs
Economists believe addressing public needs in areas like healthcare and education will play a key role in economic growth. Tian Xuan of Tsinghua University highlighted the government’s focus on people-centred investments combined with innovation and supportive fiscal policies.
Traditional industries are providing diminishing returns, while sectors like healthcare and advanced education are emerging as key growth drivers. By supporting these areas, the government aims to translate policies into impactful projects.
Economic Outlook
China will release economic data for January and February on March 17, which may provide clearer insights. Some global financial institutions have adjusted their GDP forecasts upwards, partly due to anticipated AI investments.
An anonymous expert from the National Development and Reform Commission stated that the 5% growth target is realistic and backed by detailed government planning. If economic challenges arise, policymakers are ready to introduce additional measures to maintain steady growth.
