China to outline 2025 economic targets amid uncertainty over Trumpian trade war

China is set to reveal its economic targets for 2025, following the rising economic uncertainty supposedly caused by trade war threats from US President Donald Trump. The annual meeting of the National People’s Congress (NPC) will begin on March 5 in Beijing, where Premier Li Qiang will deliver the Government Work Report. 

According to a Tuesday Bloomberg update, the closely watched document will list the Asian country’s economic goals, including targets for GDP growth, inflation, employment, and the fiscal deficit.

Economists expect the Chinese government to focus on strengthening domestic demand, expanding social support measures, and ensuring stability in the labor market. Yet, Beijing’s economic roadmap may soon be overshadowed by a wave of US trade sanctions, with multiple investigations into China’s trade practices set to reach Trump’s desk on April 1.

Beijing economic goals predictions for 2025

China’s inflation data, which came out before the NPC meeting, shows that the consumer price index rose from 0.1% in Dec to 0.5% in Jan 2025. This was higher than the 0.4% that the market had expected. 

Food prices, which had been in decline at the end of 2024, rebounded in January, with pork prices rising 13.8% year-over-year and fresh vegetables seeing a 2.4% increase. Increases in healthcare, education, and housing costs caused non-food commodities to rise.

China’s economic policymakers are expected to set a GDP growth target of around 5%, though some analysts anticipate a range of 4.5% to 5%. Inflation targets are also likely to be revised, with economists from Citigroup predicting that the consumer price index (CPI) goal will be lowered from 3% to 2%.

Fiscal policy is forecasted to take a more expansionary approach, with HSBC economists forecasting a broad-based fiscal deficit of 9.1% of GDP, an increase that exudes a more aggressive stimulus plan. 

In the labor market, the government is expected to set a goal of at least 12 million new urban jobs, aligning with the number of college graduates entering the workforce this year.

Spending priorities will likely focus on domestic consumption and industrial upgrades. UBS analysts anticipate an expanded trade-in program for consumer goods, increased corporate investment in equipment, and large-scale infrastructure projects. 

Beijing could consider providing capital injections for banks to facilitate debt restructuring for local government financing vehicles and offering subsidies to families with young children. In turn, pensions for retirees may also see an increase.

Per sources familiar with the matter, cited by Bloomberg, these economic targets and policies have been formulated behind closed doors over several months and are largely insulated from external pressures. They will be tested by the potential escalation of US trade tensions in the weeks following the NPC meeting.

US trade tensions loom over policy plans

China’s policymakers are indeed seeking to stabilize economic growth, but they must also contend with the threat of President Trump’s sanctions. The Trump administration is reportedly working on new trade restrictions to limit China’s technological advancements. 

The US government wants to introduce tougher semiconductor export controls and efforts to push key US allies, such as Japan and the Netherlands, to tighten restrictions on China’s access to advanced chip-making technology.

Recent meetings between Trump officials and their Japanese and Dutch counterparts have explored ways to restrict engineers from Tokyo Electron Ltd. and ASML Holding NV from servicing semiconductor manufacturing equipment in China. 

The discussions suggest Washington is headstrong on restricting Beijing’s ability to develop its chip industry, efforts that began under the Biden administration.

US officials could also consider adding new sanctions on several types of Nvidia chips that can be exported to China without a license. There are also early-stage talks about imposing stricter limits on the number of AI chips that can be shipped globally without the American government’s approval.

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