China set the economic growth target for 2025 at 5% on Wednesday, vowing to “rise to the challenge and strive for success” amid a lack of domestic demand and a challenging external environment.
Delivering the government work report at the start of China’s biggest political meetings of the year, Chinese Premier Li Qiang acknowledged that China’s trade and tech sectors face mounting external pressure caused by the intensification of protectionism around the world, the obstruction of the multilateral trading system, the increase of tariff barriers and rising geopolitical tensions.
“Domestically, the foundation for economic recovery is not yet solid, and there is insufficient demand, especially the sluggish consumption,” Li said during a speech delivered in front of thousands of members of the Chinese Communist Party, including Chinese President Xi Jinping.
In light of these challenges, Li said the Chinese government aims to achieve the 5% economic growth target by “vigorously boosting consumption, improving the efficiency of investment and expanding domestic demand on all fronts,” according to a readout released by China’s state-run Xinhua news agency.
“Achieving these goals won’t be easy, and it will require hard work,” he said.
Analysts say the economic growth target shows China is prioritizing “stability” over “major economic progress” in 2025. “A large part of China's economic growth last year was supported by exports, but the looming trade war with the United States has brought unpredictable risks to Chinese exports in 2025,” said Wang Kuo-chen, an economist at the Chung-Hua Institute for Economic Research in Taiwan.
“Since China’s domestic demand remains insufficient, they can only rely on boosting consumption to drive economic growth in 2025,” he told VOA by phone.
To boost domestic consumption and demand, Li said Beijing will introduce some bold stimulus measures, including implementing more vigorous fiscal policies, lowering interest rates at the right time, and implementing economic policies aimed at “improving people’s livelihoods and boosting domestic consumption.”
The Chinese government will aim to direct more resources and capital to “support the expansion of employment, help people increase their income, and strengthen consumption incentives,” Li said during the speech.
Wang in Taiwan said while the Chinese government has repeatedly vowed to boost domestic consumption since last year, the exodus of foreign businesses and the overall trend of income reduction across the country will make it difficult for China to achieve this goal in 2025.
“As long as more capitals are poured into emerging industries such as electric vehicles and artificial intelligence, which are key sectors highlighted by Chinese President Xi Jinping, the private sector as a whole will remain weak, and there won’t be sufficient domestic demand,” Wang said.
To maintain China’s competitiveness in emerging industries, Li said China in 2025 will focus on stimulating innovation and the digital economy.
Relevant measures include better combining digital technology with manufacturing and market advantages and “vigorously developing new-generation intelligent terminals such as intelligent network-connected new-energy vehicles and intelligent manufacturing equipment.”
In addition to artificial intelligence, other emerging industries that Li said China also aims to further develop in 2025 include quantum technology, embodied technology, and 6G.
Before the annual legislative meetings, Chinese President Xi Jinping held a symposium with leaders from several Chinese tech giants on February 17, urging “efforts to promote the healthy and high-quality development of the country's private sector.”
Some experts say that while the Chinese government wants to provide more state-led support to private companies in the AI and semiconductor industries, they will also ensure these companies “align themselves with China’s national priorities.”
“The government knows it needs the private sector for innovation and job creation, but it also wants to maintain control at the same time,” Lizzi Lee, a fellow on the Chinese economy at the Asia Society Policy Institute, told VOA in an e-mail.
China’s week-long legislative meetings come as Beijing and Washington gear up for a potential trade war. On Tuesday, the United States enhanced tariffs against all Chinese imports to 20%, prompting China to retaliate by imposing tariffs ranging between 10% to 15% on a wide range of agricultural products from the U.S.
During his speech on Wednesday, Li said China will “stick to the path of peaceful development, oppose all forms of unilateralism and protectionism, and uphold international justice.”
“China is willing to work with the international community to call for an equal and orderly multipolar world and an inclusive economic globalization,” he said during the hour-long remarks.
In light of the U.S. government’s tariff hikes against several countries, including allies such as Canada and Mexico, some analysts say Beijing is trying to present itself as a “more responsible” global power.
“China might actually see an opportunity to show that it can act more responsibly on certain global issues,” Dali Yang, an expert on Chinese politics at the University of Chicago, told VOA by phone.
VOA Mandarin’s Chuang Chih-wei and Yang Meng-li contributed reporting to the story.
