BEIJING: China has maintained its 2025 economic growth target at 5%, allocating more fiscal resources than last year to combat deflation and mitigate the effects of rising US trade tariffs.

This target, confirmed by a government document ahead of the National People's Congress (NPC), includes a budget deficit target of 4% of GDP, up from 3% in 2024. China plans to issue 1.3 trillion yuan in special treasury bonds and allow local governments to issue 4.4 trillion yuan in special debt.

To boost domestic consumption, the government will allocate funds for consumer subsidies on electric vehicles and appliances, along with re-capitalizing major state banks and supporting manufacturing upgrades. Economists stress the need for long-term reforms to address income inequality and strengthen China’s social safety net.

China is also facing increasing pressure from the US trade tariffs, which have already raised import duties by 20 percentage points since 2017, further straining the economy. Despite China’s focus on innovation and technological advancement, experts warn that balancing these priorities with consumer demand growth is crucial to avoid stagnation.