SINGAPORE: China’s 2025 gross domestic product (GDP) growth target is likely to stay “around 5 per cent”, say analysts and financial institutions, making their predictions based on economic goals set by all 31 mainland provinces, municipalities and autonomous regions.
If confirmed, this would mark the third consecutive year since 2023 that China has kept to the target of around 5 per cent.
Observers also foresee China unveiling more policy actions to boost domestic consumption and advance artificial intelligence (AI) to achieve the national growth target, as highlighted in provincial work reports.
The keenly watched growth target of the world’s second-largest economy will be unveiled in the Chinese premier’s work report at the National People’s Congress (NPC) opening on Wed (Mar 5) held as part of the annual “two sessions”.
Known as lianghui in Chinese, the concurrent meetings of the NPC, China’s legislature, and the Chinese People's Political Consultative Conference, the country’s top political advisory body, form the country’s most important political event of the year.
Ahead of the NPC opening, President Xi Jinping chaired a Politburo meeting on Feb 28 to discuss the government work report. That same day, state media agency Xinhua published Xi’s remarks expressing confidence in the economy, despite mounting external threats and domestic challenges.
CNA analysed work reports from the 31 local governments and found that most are aiming for GDP growth between 5.0 and 5.5 per cent, with a weighted average of 5.3 per cent — slightly below the 5.4 per cent for 2024.
“The sum of the parts of provincial targets should still be sufficient to reach an ‘around 5 per cent’ target, and policymakers may choose to repeat the target in a show of confidence,” said Lynn Song, ING’s chief economist for Greater China.
Analysts describe the potential target of around 5 per cent as realistic yet cautious and one that still signals China’s confidence in propping up its economy amid a challenging landscape.
A reading of the provincial government work reports released earlier this year hints at a cautious outlook.
All provinces—except Tianjin which raised its target—have maintained or slightly lowered their GDP growth forecasts.
“This is a more realistic approach in setting expectations,” observed Dr Lizzi C. Lee, a fellow on Chinese economy at the Asia Society Policy Institute's (ASPI) Center for China Analysis (CCA).
In a report released in late January, Nanjing-based Huatai Securities said that in recent years, the GDP growth target set at the two sessions has “typically been 0.3 to 0.8 percentage points lower than the weighted average of various provinces”, which is 5.3 per cent.
Based on this trend, the firm expects the national GDP target to remain around 5 per cent.
China Galaxy Securities echoed this prediction, noting that Beijing, Shanghai, Guangdong and Jiangsu — all of which have set GDP growth targets of around 5 per cent — have historically aligned their targets with the national level.
Economic powerhouses such as Guangdong, Jiangsu and Shandong will play a critical role in driving China’s growth, according to Guotaijunan Securities in a report released in late January.
Assoc Prof Alfred Wu from the Lee Kuan Yew School of Public Policy (LKYSPP), highlighted that similar targets set across provinces reflect a top-down approach.
“Everyone just tries to keep it between 4.5 to 5 per cent,” he said. “All local leaders now know the taste of central government, so they will not actually take any risk,” he added, noting that the "deviation is much smaller" in statistical terms.
Meanwhile, China’s highly centralised system enables it to achieve around 5 per cent GDP growth “if there is political will to do so”, said Dr Lim Tai Wei, a professor at Japan’s Soka University.
He cited the effectiveness of subsidies in the consumer goods trade-in programme and the “mobilisation of netizens” in promoting Nezha 2, which boosted cinema ticket sales and tourism, as examples of successful economic stimuli.
China’s GDP grew 5 per cent last year, down from 5.2 per cent in 2023. This year, its economy faces a raft of external and internal pressures.
Domestic demand remains sluggish. On the foreign front, uncertainty is growing with US President Donald Trump stacking an extra 10 per cent duty on Chinese goods— effective Mar 4 — on top of the 10 per cent already levied on Feb 4, bringing total additional tariffs to 20 per cent.
“It is unsurprising that some provinces may choose to take a more cautious outlook,” said Song.
“It makes sense to hope for the best but prepare for the worst, so it would be good to set into motion policies that can help support domestic demand in the scenario where external demand weakens thanks to more trade protectionism abroad.”
It is obvious that boosting domestic demand will be critical in 2025, said Assoc Prof Wu.
“They are realistic about exports. So now, the only option is to boost domestic consumption,” he added.
China Galaxy Securities noted in its report how among the 31 provinces, 16 have explicitly listed promoting consumption or leveraging consumption as a key measure to expand domestic demand in their annual priority tasks.
For instance, Shanghai pledges to "vigorously boost consumption", while Hebei focuses on "investment to promote consumption".
Analysts say one of the most effective policies to stimulate spending is China’s trade-in programme, which offers subsidies for replacing outdated goods with newer, improved options.
Subsidies now cover consumer electronics such as mobile phones, tablets, and smartwatches, as well as home appliances and automobiles.
The policy impact is already evident. Some 6.8 million vehicles were traded-in, while 62.76 million household appliances, including televisions and air conditioners, were exchanged in 2024 - driving over 1.3 trillion yuan (US$179.52 billion) in sales.
“It’s likely that these policies will take the leading role this year,” said Song.
Provinces are also rolling out subsidies earlier. “Provinces including Shandong, Guangxi, and Heilongjiang have already announced implementation details in mid-to-late January,” Shanghai-based Everbright Securities’ report said.
Beyond the trade-in initiatives, there is also emphasis on experience-driven spending in cultural tourism and entertainment.
“We also see provinces like Zhejiang and Guangdong, which have strong digital and entertainment economies, doubling down on live-stream commerce, esports, and digital content as new consumption drivers,” said Lee from the Asia Society Policy Institute.
She also noted that the silver economy is becoming an increasing priority, “with nearly every province now discussing it.”
“Expect plans to expand elderly care, smart home technology, and healthcare services tailored to an ageing population,” Lee added.
Most Chinese provinces have lowered their consumer price index (CPI) targets to around 2 per cent for 2025, down from 3 per cent last year, reflecting expectations of weak consumer demand.
The CPI, a key inflation measure, rose 0.2 per cent in 2024, matching the 2023 figure — the lowest increase since 2009, according to the National Bureau of Statistics (NBS).
From the provincial government work reports, 27 out of 31 local governments have adjusted their CPI targets downward.
Lee expects the national CPI target to be adjusted similarly.
This lines up with what we heard in December’s Economic Work Conference, where policymakers emphasised the need for ‘reasonable price recovery’,” she added.
“Lower CPI targets suggest Beijing is not expecting a sharp rebound in consumer spending anytime soon.”
Meanwhile, Song said the inflation target is unlikely to prompt major policy shifts.
"There is not too much of a significant implication in terms of policy – the inflation target historically has been less rigidly upheld, and used to be more out of concern of inflation going well above target rather than below (it)."
Unsurprisingly, AI is front and centre in China’s industrial strategy this year, with 21 out of 31 local governments listing AI+ — an initiative to embed AI across both traditional and emerging industries — as a key policy priority.
This comes as China accelerates efforts to establish itself as a global leader in AI development, following key breakthroughs such as DeepSeek’s AI model and the growing prominence of humanoid robots.
Beijing has outlined plans to integrate AI into advanced manufacturing, while Tianjin is accelerating the development and adoption of domestic technologies, including Hygon chips, Phytium computing chips, and the Kylin AI operating system.
Lee said the key takeaway is that China is fully committing to AI-driven industrial transformation, extending beyond finance and healthcare to manufacturing, smart logistics and industrial automation.
“What I find especially interesting is how much attention is going into data and computing power infrastructure. Provinces like Inner Mongolia and Guizhou are announcing plans to build AI compute clusters,” she said.
Reducing social logistics costs through measures such as cargo route optimisation is also a key priority, mentioned by 17 provinces in their work reports.
Yunnan, for instance, plans to expand its logistics network along the China-Laos railway.
In central and western regions such as Sichuan, Guizhou, Ningxia, Shanxi, Hunan, and Jiangxi, the local governments are ramping up efforts to develop strategic industrial hubs, reinforcing China’s broader push to bolster its manufacturing and technological base amid global uncertainties.
All eyes are now on the two sessions that start on Mar 4 for more insights on China’s national priorities.
“We don’t expect any huge surprises at the two sessions – many of the key changes this year have already been telegraphed ahead of time,” said Song.
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