Amidst global economic uncertainties, China has set an ambitious course for 2025, reaffirming its position as a stabilizing force in the world economy. With a GDP growth target of around 5%, the annual Two Sessions meeting of China’s top legislative and advisory bodies unveiled a comprehensive plan centered on domestic consumption, technological innovation, and financial stability.
The economic blueprint for 2025 includes a notable shift towards expansionary fiscal policies, with the deficit-to-GDP ratio set at 4% compared to last year’s 3%. Liu Shangxi, former president of the Chinese Academy of Fiscal Sciences, termed this increase as a “clear and significant” adjustment aimed at reinforcing economic resilience.
To support this, the government will issue 1.3 trillion yuan in ultra-long special treasury bonds, an increase of 300 billion yuan from the previous year, alongside 4.4 trillion yuan in local government special-purpose bonds. A significant portion of these funds will be directed towards stimulating domestic consumption, particularly through trade-in programs for consumer goods.
“Expanding domestic demand is the top priority among the ten key tasks outlined in the government work report,” said Tian Xuan, associate dean at the PBC School of Finance, Tsinghua University. The dedicated 300 billion yuan for such initiatives is expected to spur spending while driving consumption upgrades.
China’s strategic shift from an export-driven model to a consumption-led economy reflects its broader objective of enhancing endogenous growth. Erik Solheim, former UN Under-Secretary-General and Executive Director of the UN Environment Programme, highlighted China’s vast domestic market as a key driver for sustained economic momentum.
“The targeted stimulus packages not only bolster China’s resilience against global uncertainties but also present enormous opportunities for foreign businesses,” he noted.
Ronick Chan Chun-ying, Hong Kong’s deputy to the National People’s Congress (NPC) and advisor at Bank of China (Hong Kong), echoed this sentiment, emphasizing that maintaining a 5% growth rate underscores China’s confidence, which, in turn, reinforces global investor sentiment.
A defining feature of China’s economic plan is its strong emphasis on technology and innovation. Premier Li Qiang, in his address to the NPC, underscored the need for advancements in quantum technology, biomanufacturing, embodied AI, and 6G as pivotal areas for future economic expansion.
The “AI Plus” initiative is set to integrate digital technologies with manufacturing, fostering the application of large-scale AI models in next-generation intelligent terminals and smart manufacturing. This marks a strategic pivot towards a more technologically advanced industrial ecosystem.
Patrick Nijs, co-founder of the EU-China Joint Innovation Center, pointed out that “Europe will realize that we need Chinese technology,” highlighting the need for structured collaboration in areas such as sustainable agriculture and green energy.
China is also taking decisive steps to attract foreign investment by opening up sectors such as telecoms, medical services, education, and internet-related industries. The government aims to encourage reinvestment by foreign enterprises and facilitate deeper collaboration along industrial supply chains.
David Perez-Des Rosiers, Director of the Canada-China Business Council Beijing Chapter, emphasized the strategic importance of these measures: “China’s commitment to expanding service sector openness and attracting foreign investment offers positive perspectives for Canadian businesses, particularly in education and technology.”
Despite geopolitical tensions, a recent business survey indicated that 70% of Canadian enterprises still consider China a top-five priority for business or investment, underscoring the enduring appeal of the Chinese market.
Alongside economic growth, China aims to create over 12 million new urban jobs in 2025 while maintaining an unemployment rate around 5.5%. Economic analysts suggest that each percentage point of GDP growth can generate approximately 2.4 million jobs, making the 5% growth target a viable pathway to achieving these employment goals.
The government also outlined plans to promote phased free preschool education and implement policies to support birth rates, indicating a broader commitment to long-term demographic stability and social welfare.
China’s economic trajectory is increasingly intertwined with its commitment to sustainability and global economic integration. Solheim identified “stability” and “innovation” as the two defining themes of this year’s Two Sessions, emphasizing that China’s leadership in green technology and environmental initiatives is crucial in an era of climate uncertainty.
Echoing this perspective, Bernardo Mendia, Board Advisor at the EU Young Entrepreneurs Association, stressed the importance of preventing technological decoupling between global powers. “The world is becoming more balanced, and fostering cooperation in sustainability is critical,” he stated.
China’s 2025 economic roadmap signals a strategic pivot towards an innovation-driven, consumption-led, and financially stable growth model. While uncertainties persist in the global landscape, China’s policies reflect a concerted effort to reinforce economic resilience, attract foreign investment, and drive technological advancements.
As the world grapples with shifting economic paradigms, China’s commitment to balancing stability and innovation positions it as a key player in shaping the future of global economic recovery and sustainable development. (The author is: Chairman of the Belt and Road Initiative for Sustainable Development BRISD and can be reached at [email protected])
