China unveils resilient growth target with strong policy support

China has set an economic growth target of around 5 percent for 2025, reflecting a sound economic outlook despite increasing global uncertainties, as policymakers are determined to secure steady recovery through decisive and effective measures.

Premier Li Qiang on Wednesday announced the goal when delivering the government work report to the annual session of the National People's Congress for deliberation. The report outlines an array of other key development goals for this year, including a surveyed urban unemployment rate of around 5.5 percent, over 12 million new urban jobs, and an around 2 percent increase in the consumer price index.

The country achieved economic growth of 5 percent in 2024 as an impactful policy package, along with other pro-growth measures, helped fuel strong economic momentum.

As 2025 marks the final year of China's 14th Five-Year Plan (2021-2025) period and is crucial for crafting the next five-year blueprint, observers believe that the government policies will not only drive sustained growth this year but also lay the groundwork for the country's modernization drive in the long run.

Reasonable, achievable goal

Why has the Chinese government maintained the growth target at around 5 percent?

The premier explained that the goal, backed by growth potential and favorable conditions, meets the need to stabilize employment, prevent risks and improve the people's wellbeing, while also being well aligned with the country's mid- and long-term objectives.

Huang Qunhui, a national political adviser from the Institute of Economics of the Chinese Academy of Social Sciences, described this year's economic growth target as scientifically grounded and realistic.

"In the face of a challenging global environment, the proactive and resilient goal suggests that China is braving uncertainties with a clear, determined approach to growth," he said.

On a global scale, an around 5-percent growth rate places China among the world's fastest-growing major economies, with the economic increment equating to the annual output of a mid-sized nation.

"Achieving this year's targets will not be easy, and we must make arduous efforts to meet them," the premier said, citing challenges from an increasingly complex and severe external environment, including rising unilateralism and protectionism, and domestic difficulties, such as insufficient effective demand.

The premier called for facing difficulties head-on with stronger confidence in development.

According to the report, China will adopt a more proactive fiscal policy and a moderately loose monetary policy.

Specific measures include a new government debt increase to enable a notably higher level of spending, with 5.66 trillion yuan (US$790 billion) of government deficit, up 1.6 trillion yuan from a year ago, and the issuance of 4.4 trillion yuan of local government special-purpose bonds, an increase of 500 billion yuan over last year.

The monetary policy will ensure adequate liquidity by making timely cuts to required reserve ratios and interest rates, and offering more support for innovation, green development, consumption, private businesses and small firms, as well as the real estate and stock markets.

The policy mix will play a crucial role in ensuring that the strong economic momentum seen in the fourth quarter of 2024 will be sustained this year, said Tian Xuan, a national lawmaker and president of the National Institute of Financial Research of Tsinghua University.

Recently, the International Monetary Fund, Nomura, and other global institutions raised their growth forecasts for China.

Lu Ting, chief China economist at Nomura, said the forecast upgrade was due to the better-than-expected economic performance in the fourth quarter of 2024, growing investment in emerging sectors from AI to cloud computing, a stock market rally, and the improving real estate market.

China's mid-March economic data will show a solid start for 2025, a Citi Research report said, highlighting a rebound in consumer confidence.

More dynamic, sustainable

Fostering high-quality development is a key focus on this year's government agenda, with priorities ranging from stimulating domestic demand to developing new quality productive forces.

"We will take a people-centered approach and place a stronger economic policy focus on improving living standards and boosting consumer spending," the premier said.

Domestic demand will be made the main engine and anchor of economic growth, the report said. Ultra-long special treasury bonds totaling 300 billion yuan will be issued to support consumer goods trade-in programs.

New quality productive forces will be nurtured in line with local conditions, according to the report. China aims to foster emerging and future industries, such as quantum technology and the low-altitude economy, accelerate the upgrading of traditional industries, and combine digital technologies such as AI with manufacturing and market strengths.

The pursuit of new momentum has led to renewed vitality in the Chinese economy since the start of the year, with a vibrant consumer market mirrored by Chinese animated blockbuster "Ne Zha 2" and major breakthroughs in cutting-edge technology, including the rise of DeepSeek.

Analysts highlighted the resilience of China's tech industry amid a complex international landscape and the vast potential of the domestic market.

The new economic trend is also creating fresh opportunities for foreign investors and businesses.

Reaffirming China's commitment to opening up, the report laid out a series of initiatives, including expanding trials to open telecom, medical services, and education, supporting foreign enterprises in joining industrial chain collaboration, and ensuring national treatment in fields such as government procurement.

Foreign-funded businesses actively embraced these measures.

The report sent a strong signal that the country will continue to expand opening up and improve its business environment, said Nancy Liu, president of luxury travel retailer DFS China.

China's opening up has created enormous opportunities for the company, which has made its largest single investment in 60 years in the country's southern Hainan Province, Liu said. "We are fully confident in the long-term development of the Chinese market."