China concluded its annual National People's Congress (NPC) on March 11, 2025, leaving open major questions about the nation's economic revitalization agenda. The week-long gathering of nearly 3,000 delegates highlighted the necessity to bolster investment and consumption. However, specifics on how to reach targets are unclear, especially as the governing Communist Party is attempting to manage escalating trade tensions with the United States.
Ambitious Growth Despite Global Challenges
NPC targeted a gross domestic product (GDP) growth of about 5% for 2025, reflecting the government's intention to stimulate the economy in the face of domestic slowdowns and external pressures. Premier Li Qiang, in his work report for the year, called for prioritizing employment, risk prevention, and enhancing public well-being. The report was, however, below market expectations on fiscal spending measures, particularly with the protracted property crisis bearing down on domestic consumption. citeturn0news25
Fiscal Policies and Economic Stimulus
To support the growth objective, the government implemented a number of fiscal stimulus policies, including massive investments in infrastructure. Notably, the budget deficit target has been set at 4% of GDP, the highest in recent memory, reflecting the economic challenge ahead. The government also set an inflation target of 2%, reflecting deep deflationary pressures in the economy. citeturn0news25
Trade Tensions with the United States
The ongoing trade war with the United States brings an element of uncertainty to China's economic outlook. Both nations have imposed increased tariffs on each other's exports, suggesting a potential escalation of trade tensions. China has shown determination to respond to any further action by the American administration, asserting that it stands ready to defend its economic interests. citeturn0news25
Defense Spending and National Security
Reacting to what it describes as a "severe external environment," China has announced a 7.2% increase in its 2025 defense budget. This is aimed at improving military readiness and modern combat capabilities amid heightened tensions with the U.S. The increased defense spending reflects China's priority in strengthening national security in the face of external pressures. citeturn0news26
Technological Self-Reliance and Innovation
The NPC prioritized the development of artificial intelligence (AI) and technological self-reliance, focusing on R&D in key fields such as smart manufacturing and new-energy vehicles. These are aimed at closing the technological gap with Western countries and making China a frontrunner in future technologies. citeturn0news27
Battling the Slowdown in the Real Estate Sector
To address the property market slowdown, the government will lift property transaction restrictions and ensure that housing projects are completed on schedule. These measures aim to steady the property market and restore consumer confidence, which plays a significant role in sustaining economic growth. citeturn0news27
Leadership and Health Concerns
The session ended without Zhao Leji, the chairman of the Congress's Standing Committee, who didn't attend due to a respiratory tract infection. Vice Chairman Li Hongzhong presided over the closing session instead, maintaining continuity of proceedings. citeturn0news22
Conclusion
China's 2025 National People's Congress concluded with grand ambitions to revive the economy, drive technological innovation, and build national defense. However, the realization of such plans will depend on whether the government is able to implement concrete policies amidst domestic challenges and global uncertainties. The coming months will be pivotal in determining how China navigates these complexities to achieve its economic and strategic goals.
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