China has announced new fiscal measures to ramp up its economy amid escalating trade tensions with the United States, aiming for a 5% growth target in 2025.
Premier Li Qiang, addressing the National People’s Congress, highlighted the challenges posed by a “severe external environment,” with the trade war impacting China’s industrial sector and domestic demand remaining sluggish.
To stimulate growth, the government plans to issue 1.3 trillion yuan ($179 billion) in special treasury bonds and allow local governments to issue 4.4 trillion yuan in special debt.
The emphasis on “boosting consumption” has been elevated to a top priority, with the term mentioned 31 times in Li’s report, up from 21 times last year.
Artificial intelligence development also received significant attention, with plans to foster its application in sectors like electric vehicles and robotics.
However, some analysts express skepticism about the sufficiency of these measures, suggesting that more comprehensive economic reforms may be necessary to drive internal demand.
The ongoing trade war with the U.S., marked by increased tariffs, poses additional risks to China’s growth strategy.
As China navigates these challenges, the effectiveness of its fiscal stimulus and policy adjustments will be key in sustaining economic stability and achieving its growth objectives.
