Despite the looming threat of a trade war with the U.S., China has set its 2025 economic growth target at “around 5%”. Premier Li Qiang reported on efforts to stabilize the economy, emphasizing the need for enhanced fiscal policies and stimulus measures. Current economic challenges include weak consumer demand and tariff impacts from the U.S. China aims to transition to a more innovative economy, reducing dependence on the real estate sector.

China has reaffirmed its economic growth target at “around 5%” for the year 2025, amidst concerns regarding a potential trade war with the United States and other economic challenges. This announcement was made by Premier Li Qiang during the opening session of the National People’s Congress (NPC) held in Beijing. The government aims to stabilize economic growth during these difficult times, while refraining from drastic measures that could significantly accelerate it.

The report presented by Premier Li underscored the various challenges faced by the nation both domestically and internationally. He indicated that the global economic environment poses serious risks, particularly affecting trade, science, and technology sectors. Furthermore, Li reported that the internal foundation for economic recovery remains weak, with low consumer demand and sluggish consumption being significant concerns.

The International Monetary Fund (IMF) has revised China’s economic growth projection, estimating a 4.6% growth rate for this year, down from 5% in 2024. The Chinese government has announced plans for increased economic stimuli to combat the sluggish economic climate. This includes a more proactive fiscal policy, which will see an increase in deficit spending and the issuance of long-term bonds to support consumer rebate programs.

The imposition of tariffs on Chinese goods by the United States, introduced by former President Trump, adds pressure to an already struggling economy, compounded by a prolonged real estate slump. In response to these tariffs, the ruling Communist Party has indicated a willingness to enhance fiscal stimulus measures to boost domestic consumption and investment.

Furthermore, President Xi Jinping is focused on reducing the economy’s reliance on an indebted real estate market, pushing instead towards a more innovative, high-tech economic landscape. This shift includes developing self-sufficiency in technological production, particularly amidst increasing restrictions on U.S. technology exports. The government remains committed to achieving a growth target that is aligned with mid- and long-term developmental goals.

In December, the Communist Party announced a shift in monetary policy, moving from “prudent” to “moderately loose,” marking a significant policy change after more than a decade. The government is anticipated to increase borrowing and expenditure on various social programs, with the hope that these measures will stabilize the economy and help reach the set growth targets for 2025.

In summary, China maintains its economic growth target at ‘around 5%’ for 2025, highlighting its commitment to stabilizing the economy despite external pressures from a possible trade war and internal challenges. The government plans to implement a proactive fiscal policy with increased spending and stimulus efforts to support growth, while also aiming to transition towards a more innovative economy. The success of these strategies in achieving their targets remains uncertain amidst prevailing economic conditions.

Original Source: apnews.com

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