An aerial view of a new district of the city in the south of the city of Nanning in China on February 28, 2025.
Nurphoto | Nurphoto | Getty images
On Wednesday, China set its GDP growth target for 2025 to “around 5%” and presented recovery measures to stimulate its economy in the middle of business tensions in climbing with the United States
Beijing increased its objective of budget deficit to “around 4%” of GDP of 3% last year, according to official reportWhile the country’s best legislative body was holding its annual meeting.
The 4% deficit would mark the highest ever recorded in 2010, according to data accessible via wind information. The previous summit was 3.6% in 2020, the data showed.
The government report described the emission plans of 1.3 Billion of Yuans (178.9 billion dollars) in special long -term bonds in 2025, 300 billion yuan more than last year. 500 billion yuan of special cash bonds will be issued to support large public commercial banks.
The extended tax package also includes the publication of 4.4 billions of special obligations from the local government this year to facilitate their financing strains.
In an implicit recognition of slow domestic demand, Beijing has revised its annual objective of consumer price inflation at “around 2%” – the lowest in more than two decades – 3% or more in previous years, according to the Asia Society Policy Institute.
The new objective of inflation would serve more as a ceiling than as a target to be made. Consumer price climbed only 0.2% in 2024 And 2023While producers have decreased for over two years.
While emphasizing the increase in domestic consumption as an absolute priority, Beijing has promised to extend the trade in consumer goods with 300 billion additional yuan in ultra long special cash obligations.
China seeks to maintain the urban unemployment rate, which was 5.1% last yearto around 5.5% and add more than 12 million jobs to urban areas.
The country’s annual parliamentary rally, known as “two sessions”, began on Tuesday with the opening ceremony of the Political Advisory Conference of the Chinese People – a main advisory body.
The National People’s Congress launched its meeting on Wednesday and is expected to conclude its annual session on March 11. The Minister of Foreign Affairs and the heads of several economic departments should hold press conferences in the meantime.
The Yuan in Chinese offshore slipped to 7.264 against the US dollar while Chinese Prime Minister Li Qiang presented the work report at the meeting of the National People Congress during a live session. The CSI 300 reference index has been little moved.
The exchange rate will be kept “generally stable at an adaptive and balanced level,” he said.
The yields on state bonds at 10 years have dropped slightly while managers have promised to “make a timely reductions” of interest rates as well as required reserve ratios, which determine the amount of species that banks must hold. The Chinese Yuan offshore depressed 7,2640 compared to the US dollar.
The opening of the Chinese National Popular Congress coincides with US President Donald Trump’s planned speech during a joint session in the congressWhere Trump could share his program and his goals for the year.
On the question of Taiwan, Beijing stressed that he “would resolutely oppose separatist activities” aimed at the independence of the democratically governed island, while promoting a “peaceful development of relations between cross traits”.
Tit-for-tat prices
This year’s parliamentary meetings are involved while Trump has imposed new prices on Chinese products – an additional 20% of tasks in about a month.
Beijing responded on Tuesday with Additional prices of up to 15% on certain American goods from March 10 and restrictions on exports to 15 American companies. China too Adding 10 American companies to a list of unreliable entities that could limit their ability to do business in the Asian country. Many American companies named work in aerospace, defense or with drones.
“We hope to work with the American side to respond to the other’s concerns by dialogue and consultation on the basis of mutual respect, equality, reciprocity and mutual improvement,” said Lou Qinjian, spokesperson for the third session of the National Congress Congress on Tuesday.
“At the same time, we never accept any act of pressure or threat, and firmly defend our interests in sovereignty, security and development,” he said in Mandarin, via an official translation.
Stimulus and technology
The increase in American tasks will weigh on Chinese exports, a rare positive point in an economy with dull domestic demand.
While the second world economy increased by 5% in 2024, retail sales growth highly dropped to 3.4% compared to 7.1% in 2023. Real estate trail persisted, investments in the sector down 10.6% last year, compared to the previous year.
Investors looked closely at Beijing’s efforts to combat the country’s economic slowdown after an unexpected commitment of high -level support in September in September. The market gains resumed after the Chinese president Xi Jinping held a rare meeting last month with entrepreneurs, including Jack Ma d’Alibaba and the artificial intelligence startup, Liang Wenfeng of Deepseek.
“It is undeniable that AI technologies are accompanied by unknown risks and challenges and will bring new tasks in fields such as security, social governance, morality and ethics. … It will inevitably have an impact on production,” said Lou.
“China … is opposed to the upgrade of the concept of national security or politicization of economic and technological problems,” he said.
Although it lacks details, leadership reiterated on Wednesday that it would work to support the private sector. NPC members will carefully revise and improve a bill on the promotion of the private economy, Lou on Tuesday.
– Bernice Ooi de CNBC contributed to this report.
