by Zhao Xiaopeng

 

BEIJING, Mar. 7 (China Economic Net) - China has unveiled its economic roadmap for 2025, setting a growth target of around 5% amid plans for significant fiscal expansion and strategic investments in emerging technologies. The government work report, delivered by Premier Li Qiang at the opening of the third session of the 14th National People's Congress (NPC) on March 5, outlines a comprehensive approach to bolstering the economy through increased domestic consumption, technological innovation, and financial stability measures.

 

Hong Kong's deputy to the NPC Ronick Chan Chun-ying, also an advisor at Bank of China (Hong Kong) Limited, expressed confidence in the target, stating, "China has consistently sustained medium-to-high-speed economic growth, and its ability to maintain a 5% growth rate demonstrates the country's confidence, which in turn strengthens our own confidence."

 

A notable aspect of the 2025 economic plan is the expansionary fiscal policy. The deficit-to-GDP ratio has been set at 4%, an increase of one percentage point from last year, marking a significant shift. Liu Shangxi, former president of the Chinese Academy of Fiscal Sciences, describes this as "a clear and significant increase compared to previous years." 

 

To support this, the government will issue 1.3 trillion yuan in ultra-long special treasury bonds, up by 300 billion yuan from last year. Additionally, 4.4 trillion yuan in local government special-purpose bonds will be issued, representing a 500 billion yuan increase over 2024 levels.

 

The fiscal expansion is largely directed at boosting domestic consumption. 300 billion yuan from ultra-long special treasury bonds will be specifically allocated to support consumer goods trade-in programs. Tian Xuan, deputy to the 14th NPC and associate dean at the PBC School of Finance, Tsinghua University, highlighted this focus, stating, "Expanding domestic demand is the top priority among the ten key tasks outlined in the government work report. The dedicated 300 billion yuan for trade-in programs will not only stimulate consumption but also drive the transformation and upgrading of consumption patterns."

 

This marks a strategic shift in China's growth model. Chan pointed out that, "while last year's growth was primarily driven by exports, with domestic demand merely keeping pace. This report, however, prioritizes domestic consumption with measures to stimulate spending". 

 

Technology and innovation are also at the forefront of China's economic strategy. The government is prioritizing the development of biomanufacturing, quantum technology, embodied AI, and 6G. 

 

The "AI Plus" initiative aims to integrate digital technologies with manufacturing strengths, supporting the extensive application of large-scale AI models and the development of next-generation intelligent terminals and smart manufacturing equipment. Chan expressed optimism, stating, "The emergence of Deepseek has demonstrated that we can achieve global AI capabilities using cost-effective chips and faster processing speeds."

 

In terms of employment and social welfare, the government aims to create over 12 million new urban jobs in 2025 while keeping the surveyed urban unemployment rate around 5.5%. Tian emphasized the feasibility of these targets, explaining, "Each percentage point of GDP growth can generate approximately 2.4 million jobs. A 5% growth rate could create around 12 million jobs, and with additional policy support, we could reach 13 million." The report also outlines plans for promoting free preschool education in a phased way, and policies to boost birth rates.

 

China is also reinforcing its commitment to high-standard opening-up and foreign investment. The government plans to stabilize foreign trade, encourage foreign investment, and advance high-quality Belt and Road cooperation.

 

"To achieve the 5% target sustainably, we must ensure balanced development across all sectors." Chan explained, "accelerating foreign investment and boosting investor confidence are essential. Early measures to stabilize investment will be key to sustaining growth this year".