China has set a moderate economic growth target of 5% for 2025 due to low domestic demand and external pressures from trade tensions. Premier Li Qiang emphasizes the need for innovation, stimulating consumption, and efficient investments to meet this target. The government faces challenges, including a declining private economy and potential trade conflicts, while aiming to promote stable economic growth.

On Wednesday, China announced a moderate economic growth target of 5% for the year 2025, amidst challenges such as low domestic demand and heightened external pressures from global protectionism, tariffs, and geopolitical tensions. Chinese Premier Li Qiang, during the government work report presented at the annual political meetings, emphasized the need for resilience in the face of these hurdles.

Li recognized that the tech and trade sectors are particularly vulnerable due to international pressures, noting significant deficiencies in domestic consumption. He asserted that enhancing consumption and investment efficiency, along with stimulating domestic demand, are crucial to achieving the outlined growth target. “Achieving these goals won’t be easy, and it will require hard work,” Li stated.

Analysts interpret this growth target as a strategic focus on stability instead of ambitious growth. With external uncertainties affecting Chinese exports, particularly due to a potential trade war with the United States, experts like Wang Kuo-chen from Taiwan have highlighted the necessity for China to rely on domestic consumption for economic expansion in 2025. Government incentives aim to address this issue through bold fiscal measures and interest rate adjustments.

Li elaborated on plans to bolster domestic demand by directing resources toward employment expansion and income improvement to incentivize consumption. However, challenges persist due to the exodus of foreign businesses and declining income trends across the economy. Wang has cautioned that insufficient private sector strength could hinder consumption growth.

To maintain competitiveness in pivotal sectors like electric vehicles and artificial intelligence, China plans to stimulate innovation and enhance its digital economy. Initiatives will involve the integration of digital technology into manufacturing processes and the development of intelligent technologies, including quantum advancements and next-generation communications like 6G.

Before the legislative meetings, President Xi Jinping met with tech leaders to underscore the importance of fostering a robust private sector. Experts noted the government’s dual aim to support innovation while maintaining regulatory oversight within critical industries such as semiconductors and AI.

While concerns about a potential trade war loom, China reiterated its commitment to peaceful development and opposition to unilateral trade practices. Li expressed a desire for cooperative international relations and advocated for a fair, multipolar world. Analysts suggest that this strategy might position China as a more responsible global power amidst rising trade tensions with the U.S.

In conclusion, China’s decisions to set a 5% economic growth target for 2025 reflect its response to current economic challenges, including diminished domestic demand and international trade pressures. The government emphasizes boosting consumption and investment efficiency as critical components for achieving this target. As geopolitical tensions rise, China aims to reinforce its position as a global economic leader while fostering innovation and maintaining control over vital industries.

Original Source: www.voanews.com

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