THE Chinese Premier Li Qiang presented the annual government work report at the opening ceremony of China’s top legislature, the National People’s Congress (NPC) fully expressing the tone of seeking progress while maintaining stability, enhancing the confidence and determination for high-quality development.
The stock and money markets around the globe responded positively as investors and businessmen assessed China growth rate of 5% and inflation targets 2% amid US tariffs and escalating global trade tensions weighing down sentiment.
Evidently, China’s gross domestic product (GDP) is on track to grow at a rate of at least 5%, sustaining its position as a key driver of global growth by contributing over 30% to global expansion which is good news not just for China but also for the world at large. It seems that the Chinese policy makers have rightly set several development goals for 2025 emphasizing on achieving a GDP growth of around 5%, a consumer price index increase of around 2% and a reduction of about 3% in energy consumption per unit of GDP, reflecting the resilience and promising prospects of development.
Obviously on a global scale, an around 5% growth rate would place China among the world’s fastest-growing major economies, with the economic increment equating to the annual output of a medium-sized country. Moreover, China adopting a more proactive fiscal policy and applying an appropriately accommodative monetary policy will gear the economy in the right direction during 2025 and beyond. Thus, China’s deficit-to-GDP ratio for this year is set at around 4%, an increase of one percentage point over last year. Hopefully it will successfully navigate challenges and boost high-quality economic development. It also indicates that fiscal spending will play a significantly stronger role in supporting economic growth and that the efficiency in using fiscal spending should be higher this year
China will firmly implement the strategy of expanding domestic demand, strengthen the domestic economy, drive its expansion and broaden international cooperation through further opening up. To fulfil the target, China will issue a total of 1.3 trillion yuan (about US$182 billion) of ultra-long special treasury bonds in 2025, up 300 billion yuan from last year and earmark 735 billion yuan in the central government budget for investment in 2025. In the social development sector, the Chinese policy makers’ ensuring of a solid foundation for economic advancement includes areas such as housing, ecology, employment, education, healthcare and social security is wise decision gearing a balanced socio-economic pattern in the country.
Moreover, conducting specialized law enforcement actions regulating business practices, purifying the market environment, intensifying efforts in the renovation of urban villages and dilapidated houses and stimulating new demand in the existing economy is a well-planned economic strategy for the immense social development of the rural areas which has great significance. China’s commitments to expanding higher-standard opening up, stabilizing foreign trade and investment and fostering a first-rate business environment is a long term economic strategy attracting more and more inflows of the FDIs and promotion of private economy and companies in the country.
Since last year, China has fully applied the negative list for cross-border trade in services, launched opening-up trials for valued-added telecom services, biotechnology and wholly foreign-owned hospitals and has given all the least developed countries with which it has diplomatic relations zero-tariff treatment for 100% tariff lines. It is a good omen that the Chinese work report 2024-25 delivered by the premier vividly reflected its strategic priorities mainly innovation, modernization, qualitative industrialization, scientific intensification for breakthroughs in core technologies in key fields, R&D advancements in frontier and disruptive technologies and to accelerate forward-looking planning for major science and technology projects which would be a value addition in its persuasion of the high quality development and cornerstone of its further opening-up in the days to come.
China is increasingly relying on strategic emerging sectors like bio-manufacturing, quantum technology and 6G, with a focus on promoting service-oriented manufacturing. This will further consolidate its economy, industry and GDP growth in 2025 and beyond. The integration of artificial intelligence across industries is set to unlock the full potential of the digital economy. Through the two sessions, China is prioritizing tech innovation by improving the market ecosystem and supporting AI applications, along with the development of intelligent terminals such as NEVs, AI-enabled devices and humanoids. Additionally, emerging industries like commercial aerospace and the low-altitude economy will drive the digital transformation of manufacturing, enhancing China’s momentum in smart economy development. This strategy will bolster economic stability, sustainability, export diversification, industrial modernization and digitalization, positioning China as a global leader in innovation and technology, with long-term implications for its economic and industrial growth.
In summary, it seems that China is now transitioning toward a high-quality development model where technological advancement, consumption-led growth and financial stability take precedence. The issuance of ultra-long special treasury bonds and increased local government spending highlight an evolving fiscal strategy that prioritizes economic resilience. The Chinese policy makers have set GDP 5%, CPI 2%, urban employment 12 million and value added high tech industries manufacturing 8.9% showing the real strength of its economy. Comparatively, during 2024, China’s GDP reached 134.9 trillion Yuan (about US$18.77 trillion), with a 5% growth rate. High-tech manufacturing witnessed an 8.9% increase and new energy vehicle production exceeded 13 million units. It also contributed about 30% to global economic growth while maintaining over US$3.2 trillion in foreign exchange reserves.
—The writer is President, Pak-China Corridor of Knowledge, Executive Director, CSAIS, regional expert: China, CPEC & BRI.
(mehmoodulhassankhan@yahoo.com)
