BEIJING — China is wrapping up its biggest political event of the year on Tuesday leaving one question unanswered: How far will it go to try to revive economic growth in 2025?
A recurring theme throughout the weeklong meeting of the nearly 3,000-member National People’s Congress was the need to boost investment and consumer spending.
How much will be done to translate words into action will only become clear in the months ahead as the ruling Communist Party juggles priorities. What is clear is that a trade war with the United States has left the outlook for the coming months uncertain.
At stake is the health of the world’s second largest economy, a major exporter of products to countries around the world and an important market for foreign companies from Apple to Volkswagen. A prolonged property crisis has sapped consumer and business confidence, depriving the economy of its past vitality. Now, a tariff war unleashed by U.S. President Donald Trump is compounding those problems.
The Congress opened with the announcement of an economic growth target of “about 5%” for this year, a level that analysts said would be difficult to achieve with the measures detailed during this year’s Congress.
They include borrowing more money for a slew of initiatives, such as giving 300 billion yuan ($41.3 billion) in rebates to consumers who trade-in old cars and appliances for new ones. But much of the borrowing will go to supporting the housing market and local governments weighed down by debt.
“It is unclear how much of a jolt this budget will provide to underlying domestic demand and reflation efforts, despite the sizeable rise in the deficit,” Jeremy Zook, the lead China analyst for Fitch Ratings, said in a report.
The ambitious 5% growth target signaled to analysts that more stimulus may be coming. Last year, the government surprised stock markets with various moves beginning in September to push growth up to 5%, also the target in 2024.
Finance Minister Lan Fo’an told journalists covering the Congress that the government had sufficient tools in reserve to deal with external or domestic uncertainties.
Chinese President Xi Jinping