Chinese President Xi Jinping claps during the opening session of the National People's Congress at Beijing's Great Hall of the People. Photo: Pedro Pardo/AFP/Getty Images.
China has set its economic growth target at around 5% for 2025, Premier Li Qiang announced at the National People's Congress (NPC) in Beijing. The goal matches last year’s, but economists say achieving it will be harder this time, especially with a renewed trade war with the U.S. under Donald Trump’s leadership.
China’s Economic Plan for 2025
The government’s annual work report emphasizes boosting domestic demand and creating 12 million new urban jobs to stabilize the economy. Last year, China met its growth goal through an unexpected surge in exports. In December alone, exports rose by 10.7%, contributing to a record $1 trillion trade surplus. However, Trump’s new tariffs—which doubled duties on most Chinese goods to 20%, with some reaching 45%—make a similar export-driven boost unlikely in 2025. China has responded with its own retaliatory tariffs, targeting U.S. agricultural products with levies of up to 15%.
Economists warn that unless Beijing stimulates the economy further, reaching 5% growth will be difficult. Alicia García-Herrero, Asia-Pacific chief economist at Natixis, called the target “unrealistic” without stronger government intervention.
How China Plans to Boost Domestic Demand
Premier Li stressed that domestic demand must become the economy’s “main engine”. To achieve this, the government will issue 300 billion yuan ($41.2 billion) in special treasury bonds—double last year’s amount—to support a consumer goods trade-in program. This initiative encourages consumers to replace old appliances with new ones, similar to a scheme that generated 240 billion yuan in sales last year.
China is also prioritizing high-tech innovation, which President Xi Jinping calls “new quality productive forces”. The government plans to increase funding for future industries like artificial intelligence, 6G technology, electric vehicles, and battery storage. These sectors are key to China’s green energy push, but some experts question the country’s commitment to sustainability.
Climate Goals Under Scrutiny
China has pledged to reduce its carbon intensity—CO2 emissions per unit of GDP—by 3% in 2025. However, experts say this falls short of the 18% reduction target set for the 2021-2025 period. Despite record investment in renewables, China’s heavy industries still make it one of the world’s biggest carbon emitters. Greenpeace policy adviser Zhe Yao warned that unless China improves energy efficiency, economic growth will remain tied to high energy consumption.
Increased Military Spending and Taiwan Tensions
The government also reaffirmed its commitment to “firmly advancing” unification with Taiwan and strengthening civil-military cooperation, a strategy that has raised concerns in the West. China’s defence budget will rise by 7.2% in 2025—the same as last year. Though China’s military spending is below 2% of GDP, it remains a point of tension with the U.S., where defence expenditure exceeds 3% of GDP.
The NPC’s annual session will continue until March 11, alongside the Chinese People's Political Consultative Conference, an advisory meeting shaping key policy discussions.
