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China Maintains 5% Growth Target Amid Economic Challenges

China Maintains 5% Growth Target Amid Economic Challenges

China has set its economic growth target at around 5% for 2025, keeping it unchanged from last year despite ongoing trade tensions, weak domestic demand, and a struggling property sector. The target was announced by Premier Li Qiang on Wednesday, following confirmation that China met its 2024 GDP goal, with the economy expanding by 5%.

To support growth, the fiscal deficit target has been raised to 4.0% of GDP, up from 3.0% in 2024. The government has also set a consumer inflation target of 2.0%, down from last year’s 3.0% goal, as the country continues to battle disinflationary pressures. In 2024, consumer prices rose by just 0.2%, marking the lowest inflation rate since 2003, according to Wind data.

China aims to create 12 million jobs in 2025, maintaining the same employment target as last year, while keeping the urban unemployment rate capped at 5.5%. To stimulate investment, local governments will be allowed to issue 4.4 trillion yuan ($605.6 billion) in special-purpose bonds, which are typically used for infrastructure and development projects.

Additionally, Beijing plans to issue 1.3 trillion yuan in ultralong treasury bonds, up from 1 trillion yuan in 2024, along with 500 billion yuan in special treasury bonds to help major banks strengthen their capital bases. These measures indicate China’s commitment to stabilizing its economy amid global uncertainties.

With these policy adjustments, Beijing seeks to balance economic stability and growth, though analysts warn that global trade headwinds and a fragile property market may continue to pose risks. Markets will be closely watching how China implements its fiscal policies to sustain momentum throughout 2025.

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