China has set its GDP growth target for 2025 at “around 5%”, a figure which was unveiled by Premier Li Qiang at the opening session of the National People’s Congress (NPC) in Beijing on Wednesday, March 5, 2025.
The NPC’s annual session will run until March 11, 2025.
Li announced the growth target in the annual government work report, which also outlined plans to stabilise economic growth by boosting domestic demand and creating 12 million new urban jobs.
He stressed that the target underscores China’s resolve to “meet difficulties head-on and strive hard to deliver.”
He added that under the leadership of Xi Jinping and “with the dedicated efforts of our people across the country, China can prevail over any difficulty in pursuing development. “The giant ship of China’s economy will continue to cleave the waves and sail steadily toward the future,” he said.
In the work report, Li said that the government wanted to make domestic demand the “main engine and anchor of economic growth.”
However, details on how the government would do this were scant, save for a pledge to issue 300bn yuan ($41.2bn) of special treasury bonds to support consumer goods trade-in programmes.
Beijing is increasingly focused on the need to develop domestic innovation and hi-tech industries, fields which Xi Jinping, China’s leader, calls “new quality productive forces.”
Addressing the nearly 3,000 delegates who gathered in Beijing’s Great Hall of the People for the opening session of the NPC, Li said that the government would “establish a mechanism to increase funding for industries of the future” such as artificial intelligence and 6G.
The push for “new quality productive forces”, which include electric vehicles and battery storage, is linked to China’s green ambitions.
However, experts warned that a key climate pledge in Wednesday’s report – to reduce carbon intensity by 3% per unit of GDP – was insufficient.
Carbon intensity refers to how much CO2 is emitted for every dollar of economic activity.
The prominence of heavy industries in China’s economy means that China’s carbon intensity has traditionally been much higher than other countries. In 2023, it produced twice as much CO2 per dollar as the global average.
Zhe Yao, a Global Policy Adviser at Greenpeace East Asia, stated that achieving the 3% target announced on Wednesday means that China would miss its target of reducing carbon intensity by 18% between 2021 and 2025.
“Despite the record expansion of renewables, an inconvenient truth is that China’s economy hasn’t become much more energy efficient in recent years … As policymakers continue to look for new drivers of growth, they shouldn’t forget the need for a new mode of growth that is less dependent on energy.”
Zhe Yao
The government work report also said that China would “firmly advance” the cause of unification with Taiwan and “refine the mechanisms for strengthening mutual support between civilian sectors and the military”, a reference to the civil-military fusion strategy that has caused alarm in the west.
Ambitious Target
According to Alicia García-Herrero, the Chief Economist for Asia Pacific at investment bank Natixis, the GDP target is “very ambitious.”
However, she said that it was “non-reachable” without a bigger stimulus, especially in light of the increased tariffs.
Economists believe that the 5% growth target, which is in line with 2024’s figure, will be challenging.
China reached its target last year with a last-minute export boom. Exports surged by 10.7% in December, pushing China’s trade surplus to a record $1tn.
However, with a new US-China trade war as Donald Trump settles into his second term in the White House, it will be harder to boost the economy through trade.
This week, Trump doubled tariffs on most Chinese goods to 20%, with some duties reaching 45%.
China swiftly announced retaliatory tariffs of its own, imposing duties of up to 15% on agricultural goods.
China’s challenge for 2025 will be shielding its economy from the impact of the trade war.
Economists have urged policymakers to boost stimulus measures, especially those that would put more money in consumers’ pockets to boost domestic demand.
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