China's ambitious 2025 plan for innovation and expansion

Editor's note: Imran Khalid, a special commentator on current affairs for CGTN, is a freelance columnist on international affairs. The article reflects the author's opinions and not necessarily the views of CGTN.

In 2024, China's strong economic standing and strategic planning paved the way for what looks to be a very promising 2025. The third session of the 14th National People's Congress opened at the Great Hall of the People in Beijing, showcasing China's determination to maintain economic stability and growth. The government work report delivered by Chinese Premier Li Qiang reaffirmed this commitment.

In 2024, China's economy remained strong and dynamic, achieving a solid GDP growth rate of 5 percent, surpassing the historical peak of 130 trillion Chinese yuan ($17.82 trillion) for the first time. This made China one of the world's fastest-growing major economies, contributing about 30 percent to global economic growth.

The report outlined a realistic but aggressive plan for 2025, emphasizing proactive fiscal and monetary policies to sustain momentum. China has set its GDP growth target for 2025 at around 5 percent, demonstrating confidence despite global risks. The key question is: How will China sustain this growth and achieve its 2025 goals?

A key strategy is increasing the deficit-to-GDP ratio to 4 percent from 3 percent in 2024, signaling an expansionary fiscal policy to support growth. The issuance of 4.4 trillion yuan in local government special-purpose bonds in 2025, an increase of 500 billion yuan from last year, underscores the focus on infrastructure investment.

Moreover, 1.3 trillion yuan in ultra-long special treasury bonds will finance strategic projects. Monetary policy will also remain supportive, with targeted cuts in interest rates to encourage borrowing and investment. These measures aim to inject liquidity into the market, ensuring businesses have the capital needed for growth and innovation.

China has always prioritized infrastructure development and this remains central to the 2025 economic plan. The expansion of special-purpose bonds demonstrates the government's commitment to improving transportation, energy, and urbanization. These investments will not only stimulate short-term economic growth but also lay the groundwork for long-term prosperity.

Another critical focus is accelerating industrial development. In 2024, high-tech manufacturing output rose by 8.9 percent, while equipment manufacturing grew by 7.7 percent. New energy vehicle production reached 13 million units, cementing China's leadership in green transportation. In 2025, the government aims to fast-track advancements in artificial intelligence, semiconductors and renewable energy, solidifying China's position as a global technology powerhouse. 

In addition to domestic policies, China continues to pursue market liberalization and attract foreign investment. The 2024 easing of foreign investment restrictions in manufacturing underscored China's commitment to deeper global integration. The Belt and Road Initiative remains pivotal in strengthening trade and investment ties worldwide.

China's 2025 plan also prioritizes employment and price stability. The surveyed urban unemployment rate is expected to be around 5.5 percent, while the consumer price index (CPI) is projected to grow around 2 percent. Creating over 12 million urban jobs poses a challenge, but the government aims to achieve this through infrastructure development, industrial expansion and digital economy growth to stabilize in the labor market.

Controlling inflation is also crucial, as rising prices could weaken consumer purchasing power and slow growth. Keeping CPI below 2 percent will help sustain consumption, a key driver of China's economy.

In the property sector, city-specific policies will regulate transactions to stabilize the market. Meanwhile, special treasury bonds will help state-owned lenders strengthen their capital base, enhancing financial stability and mitigating market risks.

China's economic plan for 2025 has drawn significant interest from global financial institutions. The World Bank raised its China growth forecast to 4.5 percent from 4.1 percent, while other major financial institutions align with the government's 5 percent target. China's ability to meet or surpass these projections will hinge on its capacity to manage global risks such as geopolitical conflicts, supply chain disruptions and shifts in trade patterns. However, from the standpoint of stability, innovation and strategic long-term investment, it appears that China is well-positioned to sustain its economic trajectory.

China's 2025 economic plan reflects a strategy of calculated ambition. While the targets set by the government work report are undoubtedly bold, they are underpinned by practical policies and substantial financial commitments. The leadership's focus on stability, strategic investment and global integration underscores a belief that China can navigate uncertainty while sustaining growth.

As the world grapples with economic shifts and geopolitical tensions, China's ability to innovate and adapt will determine whether it meets – or exceeds – its ambitious targets. With a solid foundation laid in 2024 and a forward-looking strategy for 2025, China is poised to remain a key driver of global economic expansion. The resilience demonstrated over the past year, coupled with a vision for the future, reaffirms China's status as an economic powerhouse, shaping the next phase of global development.

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