China intensifies policy measures to achieve a 5% growth target by 2025

China is set to enhance policy coordination in finance and consumption to meet its economic growth targets for 2025, a senior official announced during a press conference on the economy at the third session of the 14th National People’s Congress in Beijing on Thursday.

Amid increasing global uncertainties and inadequate domestic demand, China remains confident in reaching its economic growth goal of "around 5 percent" this year, according to Zheng Shanjie, head of the National Development and Reform Commission, who emphasized a solid foundation and support for this target.

The economy showed strong resilience and high-quality development in 2024, with annual GDP approximating 135 trillion yuan.

**Boosting Consumption and Services**

Consumption is identified as the main driver of economic growth, as highlighted by China’s Commerce Minister Wang Wentao, who noted the robust growth of the services sector in 2024.

Wang reported that total retail sales of consumer goods reached 48 trillion yuan in 2024, marking a 3.5 percent increase year-on-year, with service retail sales rising by 6.2 percent.

He also pointed out that the consumer market in 2025 has been lively, particularly during the Spring Festival, and mentioned that the Asian Winter Games stimulated the country’s "ice-and-snow economy," while the animated film "Ne Zha 2" significantly boosted box office attendance.

China has implemented a trade-in program across various sectors this year to promote the replacement of outdated goods with newer, more advanced products. Wang stated that this initiative has enhanced consumption, with sales of automobiles and home appliances exceeding 1.3 trillion yuan in 2024.

**Reducing Financial Pressure on Consumers**

New interest subsidy policies for certain loans will be put in place to alleviate financial strains on individuals and businesses, stimulating consumption, as announced by Chinese Finance Minister Lan Fo'an.

Lan explained that fiscal interest subsidies will target personal consumer loans in key areas and business loans in sectors closely linked to daily life, including catering, hospitality, healthcare, and domestic services. These measures aim to ease financial pressures on consumers and reduce financing costs for businesses.

**Sufficient Fiscal and Monetary Policies**

The People's Bank of China will consider cutting reserve requirement ratios and interest rates as suitable this year based on domestic and international economic conditions and financial market performance, according to Governor Pan Gongsheng.

Pan noted that the average reserve requirement ratio (RRR) for China’s financial institutions currently stands at 6.6 percent, suggesting there is room for further reductions.

Additionally, Finance Minister Lan stated that the Chinese government has ample reserve tools and policy frameworks to tackle potential internal and external uncertainties.

**Supporting Private Economy and Sci-Innovation Companies**

China's rapid technological advancements are evident in artificial intelligence, quantum technology, and cloud computing, as mentioned by Commerce Minister Wang.

Wang highlighted that since the year's start, technology firms like DeepSeek have emerged, showcasing China’s innovative capabilities and prompting a reappraisal of Chinese assets.

Wu Qing, Chairman of the China Securities Regulatory Commission, noted that AI has become a focal point during this year’s Two Sessions and confirmed that the CSRC continually emphasizes support for technological innovation while reforming the capital market and its boards.

In 2024, high-tech enterprises comprised over 90 percent of newly listed companies on the Science and Technology Innovation Board, ChiNext Market, and Beijing Stock Exchange. Wu added that efforts will be accelerated to enhance support mechanisms for the listing of high-quality technology firms.

James del Carmen contributed to this report for TROIB News

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