China has set an economic growth target of “around 5%” for 2025, according to announcements made during its annual parliamentary session. The government emphasized the implementation of a more proactive fiscal policy and monetary easing measures, as trade tensions with the United States continue to escalate under President Donald Trump’s second term.
Since Trump’s return to the White House in January, Washington has reignited a tariff war with Beijing, imposing a 20% additional tariff on all Chinese imports. This move has prompted retaliatory actions from China, reviving echoes of the trade disputes that marked Trump’s first term (2017–2021).
Despite these challenges, Beijing has maintained the same GDP growth goal for the third consecutive year. In 2024, China successfully met its target, achieving real economic growth of 5.0% compared to 2023, thanks in part to stimulus measures introduced from September that helped address a prolonged property-sector crisis.
In addition to its economic objectives, China announced plans to boost its military spending to 1.78 trillion yuan ($250 billion) in 2025, representing a 7.2% increase from the previous year. This marks the same rate of growth seen in 2024, underscoring the country’s commitment to strengthening its defense capabilities.
To stimulate domestic demand and support economic recovery, Beijing raised its budget deficit target to “around 4%” of GDP, up from 3% in the prior year. This adjustment indicates a willingness to expand fiscal spending to counteract external pressures. Furthermore, the government revised its annual consumer price inflation target downward to approximately 2%, while aiming to create 12 million new urban jobs and maintain an urban unemployment rate of around 5.5%. Consumer price inflation remained subdued at just 0.2% in both 2023 and 2024.
As part of its broader fiscal package, the government plans to issue 1.3 trillion yuan ($178.9 billion) in ultra-long-term special treasury bonds in 2025, an increase of 300 billion yuan over last year. An additional 500 billion yuan in special treasury bonds will be allocated to support large state-owned commercial banks. Local governments are also expected to issue 4.4 trillion yuan in special-purpose bonds this year to alleviate their financing burdens.
The announcements came during the “Two Sessions,” China’s annual parliamentary gathering, which began with the opening ceremony of the Chinese People’s Political Consultative Conference—a top advisory body. The National People’s Congress commenced its meeting on Wednesday and is scheduled to conclude its annual session on March 11.
Notably, the opening of the National People’s Congress coincided with U.S. President Donald Trump’s address to a joint session of Congress, where he outlined his agenda and priorities for the year. .
