The report detailed a more proactive fiscal policy, with a deficit-to-GDP ratio set at 4%, the highest on record. Tian Yun, a Beijing-based economist, said this reflects policymakers’ commitment to supporting economic growth while improving fiscal efficiency.
To boost domestic demand, China will issue 1.3 trillion yuan ($182 billion) in ultra-long special treasury bonds, a 300 billion yuan increase from last year. Additionally, the central government will allocate 735 billion yuan for investment projects.
Wang Wentao, China’s commerce minister, said consumption remains the main growth driver. Total retail sales of consumer goods in 2024 reached 48 trillion yuan, up 3.5% year-on-year, while service sector sales grew by 6.2%. He pointed to strong spending during the Spring Festival and the impact of events such as the Asian Winter Games.
To sustain demand, China has expanded its trade-in programme across multiple sectors, encouraging the replacement of outdated goods. Sales of items such as automobiles and home appliances exceeded 1.3 trillion yuan in 2024.
Lan Fo’an, finance minister, announced new interest subsidy policies to ease financial burdens on individuals and businesses. Subsidies will target consumer loans in key sectors, including catering, hospitality, healthcare, and domestic services.
Monetary policy adjustments are also expected. Pan Gongsheng, governor of the People’s Bank of China, said the country will cut reserve requirement ratios and interest rates as needed. He noted that the current average reserve requirement ratio (RRR) stands at 6.6% and could be further reduced to support liquidity.
The government report also reinforced China's commitment to innovation-driven development. Lei Jun, Xiaomi CEO and an NPC deputy, spoke at the Deputies' Corridor, emphasising the role of innovation in China's tech sector. He noted that Xiaomi has remained among the world’s top three smartphone manufacturers for 18 consecutive quarters, reflecting global recognition of Chinese technology.
China will reform research institutes, strengthen industry-academia collaboration, and give enterprises a bigger role in technological advancements. The government has pledged to accelerate major science projects and support young scientists.
In financial markets, Wu Qing, chairman of the China Securities Regulatory Commission, said AI has been a major topic at this year’s Two Sessions. He stressed that more than 90% of newly listed companies on the Science and Technology Innovation Board, ChiNext Market, and Beijing Stock Exchange in 2024 were high-tech firms.
China's push for high-standard opening-up was also reiterated. The country has fully applied the negative list for cross-border trade in services and launched trials in sectors such as telecommunications and biotechnology. All least-developed countries with diplomatic ties to China now receive zero-tariff treatment for 100% of tariff lines.
The report reaffirmed opposition to unilateralism and protectionism, stating that China will work with the international community to promote an equal and inclusive global economic order.
Xi Jinping, general secretary of the Communist Party of China, reinforced these commitments during his speeches at the NPC and the Chinese People's Political Consultative Conference (CPPCC). He stressed the role of education, science, and talent in economic modernisation. Schools will receive greater autonomy, and mechanisms will be improved to align education with industrial needs.
Xi also called for a successful conclusion to the military's five-year development plan, urging cost-effective and high-quality growth in defence capabilities. He highlighted the importance of leveraging civilian resources to enhance military efficiency.
Speaking with lawmakers from Jiangsu Province, Xi urged the region to lead in technological and industrial innovation. He called for deeper economic reforms and high-standard opening-up, encouraging greater involvement in Belt and Road cooperation. He also stressed the need for equal treatment of enterprises, regardless of ownership type.
On the global stage, Wang Yi, China’s foreign minister, positioned China as a stabilising force in international affairs. He said China remains committed to multilateralism and opposes hegemonic actions. Addressing China-US relations, he warned against attempts to suppress China while maintaining diplomatic engagement, stating that China would respond to arbitrary tariffs with countermeasures.
Wang also addressed the Global South’s growing influence, saying that these nations now account for 40% of the global economy. He called for unity in amplifying their voice in international governance.
China’s economic policies for 2025 signal a continued emphasis on stability, innovation, and global cooperation. The government’s approach balances domestic demand expansion with external market engagement while navigating an increasingly complex global environment.
China’s economic policies for 2025 hold implications for Finland and the wider EU, particularly in trade, investment, and technology collaboration. With China maintaining a 5% growth target and reinforcing its commitment to high-standard opening-up, European businesses could see expanded opportunities in sectors such as green technology, digital services, and manufacturing. Finland, with its strong focus on clean energy and innovation, may benefit from increased cooperation in areas like 5G, AI, and sustainable development. However, China’s push for self-reliance in key industries and its stance against protectionism could also lead to strategic competition, especially in advanced technologies. The EU’s approach to economic engagement with China will need to balance trade interests with concerns over market access and geopolitical tensions.
HT