CHINA will target economic growth of “around 5 per cent” this year for the third consecutive time, according to the annual work report - seen by CNA - that Chinese Premier Li Qiang will deliver at the opening of China’s annual Two Sessions.
China's economy expanded by 5 per cent in 2024, with gross domestic product (GDP) reaching 134.9 trillion yuan (US$18.77 trillion).
While China has maintained the same growth target since 2023, achieving it this year will require overcoming mounting external threats and domestic pressures.
On the foreign front, a trade war is escalating, with the US doubling duties on Chinese goods to 20 per cent, effective Mar 4.
Beijing has retaliated with additional tariffs of up to 15 per cent on American agricultural and food products from Mar 10. This is on top of tariffs announced last month, including 15 per cent on US coal and liquefied natural gas.
Back home, the world’s second-largest economy is grappling with sluggish domestic demand, a prolonged property sector crisis, an ageing population and rising youth unemployment.
Reflecting weak consumer demand, Beijing has slashed its consumer price index (CPI) target to around 2 per cent, markedly down from last year’s target of 3 per cent. This also marks the first time the CPI target is set below 3 per cent, since China started specifying the figure in the annual work report 20 years ago.
The adjustments come after its CPI, a key inflation measure, rose only 0.2 per cent in 2024 and 2023 - the lowest increase since 2009.
The Chinese government also announced a record budget deficit of around 4 per cent of GDP this year.
Ai Takes The Lead
Unsurprisingly, AI is front and centre in China’s industrial strategy this year.
This comes as China accelerates efforts to establish itself as a global leader in AI development, following key breakthroughs such as DeepSeek’s AI model. Major companies, including Baidu, Alibaba, Tencent and ByteDance, have also announced their own AI models, alongside the growing prominence of humanoid robots.
According to official government work reports, 21 out of 31 local governments have listed AI+ - an initiative to embed AI into both traditional and emerging industries - as part of their industrial policies to boost economic growth.
Analysts say the key takeaway is that China is fully committing to AI-driven industrial transformation, extending beyond finance and healthcare to manufacturing, smart logistics and industrial automation.
China has more than 4,500 AI enterprises, with the core industry valued at nearly 600 billion yuan, according to data released in January by the China Internet Network Information Center (CNNIC).
“Prime Time For Private Enterprises”
Supporting private businesses in China is a key theme, with a new private-economy promotion law expected to be discussed and potentially approved at this year’s legislative meeting.
The bill bans authorities from imposing fines on private businesses without a legal basis, and is designed to reassure the private sector after years of crackdown.
Chinese President Xi Jinping’s high-profile meeting with private business leaders in February - the first such symposium since 2018 - sent a strong signal, with Xi emphasising the private sector’s critical role in economic growth.
"The private sector enjoys broad prospects and great potential on the new journey in the new era. It is a prime time for private enterprises and entrepreneurs to give full play to their capabilities," Xi was quoted as saying by Xinhua.
China’s central bank and top financial regulators signalled further support for private enterprises on Feb 28, with analysts viewing it as a step towards facilitating financing for private firms amid their growing role in innovation.
“We will proactively strengthen policy frameworks, enhance supervision and implementation, and provide strong financial support for the healthy development of the private economy, helping private enterprises grow stronger, better and bigger,” the People’s Bank of China (PBOC) said in a statement on Mar 2.
China has more than 57 million private companies, accounting for 92 per cent of all enterprises. -March 5, 2025
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