As China enters 2025, its leadership is doubling down on economic resilience, technological innovation, and strategic investments to secure long-term growth. The opening of the third session of the 14th National People’s Congress in Beijing underscored this vision, with President Xi Jinping and Premier Li Qiang outlining ambitious economic goals in the Government Work Report.
China’s 2024 economic performance was nothing short of remarkable, with a GDP growth of 5 percent, pushing the economy beyond 130 trillion yuan ($17.82 trillion). As one of the fastest-growing major economies, contributing nearly 30 percent to global growth, China is now positioning itself to navigate a rapidly changing global landscape with a mix of fiscal stimulus, market reforms, and industrial upgrades.
Premier Li Qiang’s Government Work Report outlined an ambitious yet achievable vision for 2025, emphasizing proactive fiscal and monetary policies to sustain economic momentum. China has set a GDP growth target of around 5 percent for 2025, reflecting the leadership’s solid confidence in the economy’s potential despite global uncertainties.
The projected deficit-to-GDP ratio for 2025 is set at 4 percent, up from 3 percent in 2024. This increase underscores the government’s commitment to a more proactive fiscal policy. The country will exercise a moderately loose monetary policy, with plans to cut required reserve ratios and interest rates when appropriate. China plans to issue 4.4 trillion yuan (about $613.67 billion) in local government special-purpose bonds in 2025, an increase of 500 billion yuan over last year. Additionally, 1.3 trillion yuan ($178.95 billion) in ultra-long-term special treasury bonds will be issued.
One of the key initiatives for 2025 is the implementation of a more proactive fiscal policy.
The projected deficit-to-GDP ratio for 2025 is set at 4 percent, up from 3 percent in 2024. This increase underscores the government’s commitment to stimulating economic growth through increased public spending. By investing in infrastructure and public services, the government aims to create a conducive environment for economic activity and job creation. In tandem with fiscal policy, China will exercise a moderately loose monetary policy to support economic growth. Plans to cut required reserve ratios and interest rates when appropriate will provide the necessary liquidity to stimulate investment and consumption. These measures are expected to boost domestic demand, which is a critical driver of economic growth in the face of global uncertainties.
Additionally, monetary policy will remain moderately loose, with targeted reductions in required reserve ratios and interest rates to stimulate lending and investment. The government has also committed to issuing 1.3 trillion yuan in ultra-long-term special treasury bonds, marking a significant increase from 2024’s 1 trillion yuan. This move aims to finance key infrastructure projects and innovation-driven initiatives that will enhance China’s industrial competitiveness. One of the pillars of China’s 2025 strategy is strengthening domestic demand to ensure balanced and sustainable growth. With a goal of creating over 12 million urban jobs and maintaining a surveyed urban unemployment rate of around 5.5 percent, China is prioritizing labor market stability. Consumer price index (CPI) growth is set at around 2 percent, a move aimed at keeping inflation in check while preserving purchasing power.
Infrastructure investment is another crucial aspect of China’s economic strategy for 2025. The government plans to issue 4.4 trillion yuan (about $613.67 billion) in local government special-purpose bonds, an increase of 500 billion yuan over the previous year. This significant investment will be directed towards key infrastructure projects, including transportation, energy, and urban development. Additionally, 1.3 trillion yuan ($178.95 billion) in ultra-long-term special treasury bonds will be issued to finance long-term projects that will enhance the nation’s economic foundation. The government’s emphasis on employment and price stability will also play a vital role in ensuring sustainable economic growth. The target for the surveyed urban unemployment rate is set at around 5.5 percent, while the CPI growth target is around 2 percent. By maintaining a stable labour market and controlling inflation, the government aims to create a favorable environment for economic activity and ensure the well-being of the populace.
Beyond economic measures, China is also focusing on institutional reform and further opening up its markets. In 2024, the country lifted restrictions on foreign investment in the manufacturing sector, signaling its commitment to greater economic integration. The Belt and Road Initiative continues to expand, driving trade and investment partnerships worldwide. China’s industrial upgrade remains a top priority, with 2024 marking notable progress in high-tech manufacturing and equipment production.
As the world grapples with economic shifts and geopolitical tensions, China’s ability to innovate and adapt will determine whether it meets— or exceeds— its ambitious targets. With a solid foundation laid in 2024 and a forward-looking strategy for 2025, China is poised to remain a key driver of global economic expansion. The resilience demonstrated over the past year, coupled with a vision for the future, reaffirms China’s status as an economic powerhouse, shaping the next phase of global development.
The government’s report highlighted an 8.9 percent increase in the added value of high-tech manufacturing and a 7.7 percent rise in equipment manufacturing output. With the production of new energy vehicles surpassing 13 million units last year, China is well on track to becoming a global leader in green technology.
Climate change response is another key initiative for 2025, reflecting China’s commitment to sustainable development. The government plans to develop a package of major projects aimed at addressing climate change, which will not only contribute to environmental protection but also create new opportunities for economic growth.
By investing in renewable energy, green technologies, and sustainable infrastructure, China is positioning itself as a global leader in the transition to a low-carbon economy. For 2025, further emphasis will be placed on advancing cutting-edge sectors, including artificial intelligence, semiconductors, and renewable energy. The government has pledged to develop a comprehensive package of major projects for climate change response, underlining its commitment to a sustainable and innovation-driven economy. In 2025, China plans to introduce city-specific policies on property transaction restrictions, ensuring a more stable real estate market while supporting urban development. Additionally, special treasury bonds will be issued to support state-owned lenders in replenishing capital, further strengthening financial stability.
By focusing on proactive fiscal and monetary policies, infrastructure investment, employment stability, price control, and sustainable development, China is well-positioned to achieve its economic goals and contribute to global economic growth. China’s 2025 economic blueprint is one of measured ambition. The leadership’s focus on stability, strategic investment, and global integration underscores a belief that the country can navigate uncertainty while sustaining growth.
As the world grapples with economic shifts and geopolitical tensions, China’s ability to innovate and adapt will determine whether it meets— or exceeds— its ambitious targets. With a solid foundation laid in 2024 and a forward-looking strategy for 2025, China is poised to remain a key driver of global economic expansion. The resilience demonstrated over the past year, coupled with a vision for the future, reaffirms China’s status as an economic powerhouse, shaping the next phase of global development.
