BEIJING (Reuters) – China’s Premier Li Qiang is expected to unveil the country’s main economic targets for 2025 at an annual parliament meeting which kicks off on March 5.
GROWTH TARGET
Beijing is expected to keep its economic growth target unchanged at roughly 5%. Analysts say this goal is ambitious, given China is fighting a trade war with the United States, which is threatening its exports.
China’s economy grew 5.0% in 2024, thanks to a stellar export performance and a late stimulus push.
BUDGET DEFICIT
The budget deficit is set to be raised to 4% of gross domestic product (GDP) from last year’s 3%, Reuters reported in December. The figure would be in line with a “more proactive” fiscal policy outlined by top leaders late last year.
SPECIAL BONDS
Authorities plan to issue a record 3 trillion yuan ($413.13 billion) worth of special treasury bonds this year, a sharp increase from last year’s 1 trillion yuan, Reuters reported in December.
Of these, about 1.3 trillion yuan would fund consumer subsidies, business equipment upgrades and investment projects of strategic significance.
A chunk of the rest is earmarked for investments in “new productive forces,” Beijing’s shorthand for advanced manufacturing, such as electric vehicles, robotics, semiconductors and green energy.
The new debt could also be used to infuse fresh capital into state banks. Bloomberg News reported on Wednesday that at least 400 billion yuan will be injected in coming months.
LOCAL GOVERNMENT SPECIAL BONDS
Markets expect more local government special bonds issuance this year.
Goldman Sachs estimates Beijing will raise the special debt quota municipalities would be allowed to issue to 4.7 trillion yuan, from 3.9 trillion yuan in 2024, while UBS expects at least 4.5 trillion yuan.
EMPLOYMENT
Policymakers have repeatedly said that a stable job market remains their utmost priority. Last year, officials said the economy created 12.56 million new urban jobs, meeting the target to surpass 12 million.
Goldman Sachs analysts expect a similar goal this year. This would imply an official surveyed unemployment rate target of around 5.0%, down from last year’s “around 5.5%”.
A record 12.22 million college students are expected to graduate in 2025 and look for jobs.
INFLATION
Local media said China may lower its consumer price inflation target this year to “around 2%” from “around 3%”.
China is flirting with deflation so this target, which economists interpret as a ceiling rather than a goal, is not as closely watched. Consumer prices rose just 0.2% last year.
($1 = 7.2616 Chinese yuan)
(Reporting by Ellen Zhang and Marius Zaharia; Editing by Sam Holmes)
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