Premier Li Qiang is expected to officially announce the target Wednesday morning as he delivers his report to the national parliament in Beijing. This marks the third straight year has China maintained that goal, but repeating it again will be difficult.
China also set this year’s fiscal deficit target to around 4% of gross domestic product — the highest level in more than three decades, according to the work report seen by Bloomberg News. The GDP and general budget deficit goals are in line with economist expectations heading into the meeting.
“This is positive and important as a growth stabilizing factor,” Wee Khoon Chong, senior APAC market strategist at BNY, said of China’s targets. “All that’s needed now is effective implementation of all measures announced. We expect further credit and monetary easing to complement China fiscal strategy.”
The meeting of the National People’s Congress comes one day after Donald Trump imposed another 10% tariff on China, threatening to cripple the export engine that last year contributed to almost a third of economic expansion. Adding to Beijing’s problems, the nation is on track to record its longest streak of deflation since the 1960s, while the property crash has yet to bottom out.
President Xi Jinping’s bullish goal will likely require his lieutenants to roll out more aggressive stimulus as promised in December. Economists have called for that campaign to include greater public spending directed, at least in part, toward boosting weak consumer spending.
Maintaining a brisk pace of economic growth is important to social stability. Every one percentage of GDP expansion can lead to the creation about 2.5 million new jobs, making around 5% growth a necessity to keep employment steady, according to estimates by Zhu Baoliang, formerly chief economist at think tank the State Information Center. The government forecast over 12 million graduates will enter the job market in 2025, slightly higher than last year.
In a tacit recognition of deflationary pressures, the government lowered its official target for consumer price increase to around 2%, according to the report seen by Bloomberg News, the lowest since 2003. While that goal was largely regarded as a ceiling in the past, trimming it shows officials have conceded faster price growth will be a challenge after consumer inflation reached only 0.2% for the past two years. A growing chorus of economists are calling for the government to make the target a binding one for policies.
Li’s report delivered to thousands of delegates at the Great Hall of the People will also provide clues on authorities’ specific plans for fiscal and monetary stimulus, which could impact global commodity prices and inflation.
First Published: Mar 5, 2025 6:16 AM IST
