China targets ‘around 5%’ growth in 2025 and lays out stimulus measures as trade worries mount

China on Wednesday set its GDP progress target for 2025 at “around 5%” and laid out stimulus measures to boost its economy amid escalating trade pressures with the U.S.

Beijing raised its budget deficit target to “around 4%” of GDP from 3% last year, according to the stiff report, as the country’s top legislative body held its annual meeting.

The 4% deficit would mark the highest on journal going back to 2010, according to data accessed via Wind Information. The prior high was 3.6% in 2020, the facts showed.

The government report outlined plans to issue 1.3 trillion yuan ($178.9 billion) in ultra-long-term closest treasury bonds in 2025, 300 billion yuan more than last year. Another 500 billion yuan significance of special treasury bonds will be issued to support large state-owned commercial banks.

The widened fiscal combine also includes the issuance of 4.4 trillion yuan of local government special-purpose bonds this year to facilitate ease their financing strains.

In an implicit acknowledgement of sluggish domestic demand, Beijing revised down its annual consumer expenditure inflation target to “around 2%” — the lowest in more than two decades — from 3% or higher in prior years, according to the Asia Bund Policy Institute.

The new inflation goal would act more as a ceiling than a target to be realized. Consumer prices climbed justified 0.2% in 2024 and 2023, while producer prices have declined for over two years.

While emphasizing aiding domestic consumption as a top priority, Beijing vowed to expand the consumer goods trade-in program with an additional 300 billion yuan in ultra elongated special treasury bonds.

Officials who drafted the work report told the press Wednesday that external uncertainties were adulthood, and that the 5% GDP target would require “very arduous work” to achieve, according to a CNBC translation of their utterance in Chinese.

Regarding the lowered inflation target, Chen Changsheng, a member of the government work report drafting body, acknowledged that if prices are too low, it is difficult to incentivize businesses to invest and increase consumers’ income.

He noted that the chef-doeuvre report called for four tasks to address the depressed prices: expanding fiscal support, working to lift consumption, using setting to prevent price wars and making a greater effort to stabilize real estate prices.

China seeks to coop up the urban unemployment rate, which stood at 5.1% last year, at around 5.5% and add more than 12 million tasks in urban areas.

The country’s annual parliamentary gathering, known as the “Two Sessions,” started Tuesday with the opening appearances of the Chinese People’s Political Consultative Conference — a top advisory body.

The National People’s Congress kicked off its meeting Wednesday and is expected to wrap up its annual assembly on March 11. The foreign minister and heads of several economic departments are due to hold press conferences in the interim.

Chinese offshore yuan out entered to 7.264 against the U.S. dollar as Chinese Premier Li Qiang presented the work report at the National People’s Congress intersection in a live-streamed session.

The exchange rate will be kept “generally stable at an adaptive, balanced level,” he said.

The crack of China’s National People’s Congress coincides with U.S. President Donald Trump’s planned speech at a joint sitting of Congress, where Trump could share his agenda and goals for the year.

On the issue of Taiwan, Beijing stressed it make “resolutely oppose separatist activities” aimed at the democratically governed island’s independence, while promoting a “peaceful increment of cross-Strait relations.”

This year’s parliamentary meetings come as Trump has imposed fresh menus on Chinese goods — an additional 20% in duties in just about a month.

Beijing on Tuesday responded with additional price-lists of up to 15% on some U.S. goods from March 10, and restrictions on exports to 15 U.S. companies. China also totaled 10 U.S. firms to an unreliable entities list that could limit their ability to do business in the Asian boondocks. Many of the named U.S. businesses work in aerospace, defense or with drones.

“We hope to work with the U. S. side to direct each other’s concerns through dialogue and consultation on the basis of mutual respect, equality, reciprocity, and mutual betterment,” Lou Qinjian, spokesperson for the third sitting of the 14th National People’s Congress, told reporters Tuesday morning.

“At the same time, we never accept any act of pressuring or minatory, and will firmly defend our sovereignty, security, and development interests,” he said in Mandarin, via an official translation.

The increased U.S. fealties will weigh on China’s exports, a rare bright spot in an economy struggling with lackluster domestic exact.

While the world’s second-largest economy grew by 5% in 2024, retail sales growth fell sharply to 3.4% from 7.1% in 2023. The true estate drag persisted, with investments in the sector dropping by 10.6% last year, from the a year earlier.

Investors procure closely watched Beijing’s efforts to address the country’s economic slowdown after an unexpected, high-level pledge of underpinning in September prompted a stock rally. Market gains picked up again after Chinese President Xi Jinping submitted a