Reuters with the info.
Chinese government advisers recommend a 2025 economic growth target of around 5%, despite challenges from U.S. tariff hikes and slowing global demand.
- Some advisers suggest lower targets of “above 4%” or a 4.5%-5% range.
- Maintaining a lofty target aligns with President Xi Jinping’s vision of doubling China’s economy by 2035.
Advisers advocate for stronger fiscal policies to counter tariff impacts, including raising the budget deficit above this year’s 3% of GDP and increasing domestic demand.
- Potential measures include issuing more special treasury bonds for infrastructure and offering consumer subsidies.
- Advisers emphasize balancing short-term stimulus with structural reforms (e.g., tax and welfare changes) to address long-term imbalances.
- Beijing recently announced a 10 trillion yuan debt package for municipal relief but may reserve further stimulus until U.S. tariff actions become clearer.
The background to the calls for ongoing stimulus includes Trump’s proposed tariffs exceeding 60% on Chinese imports that could reduce growth by up to 1 percentage point.
- Many manufacturers have already shifted production abroad to avoid existing tariffs.
- Exports accounted for 20% of China’s GDP in 2023 but contributed only 2.2% to net GDP growth.
- A hit to exports without offsetting domestic demand could exacerbate deflationary pressures and weaken growth.
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This article was written by Eamonn Sheridan at www.forexlive.com.
