Chinese Premier Li Qiang presented the Government Work Report on Wednesday. It sets a five percent growth target for 2025, despite global challenges, including ongoing trade tensions with the United States. CGTN's Miro Lu caught up with Hoe Ee Khor, the chief economist at the ASEAN+3 Macroeconomic Research Office, or AMRO, to discuss his outlook for the Chinese economy.

HOE EE KHOR Chief Economist ASEAN+3 Macroeconomic Research Office "I think the thing that stands out for me is the confidence and the optimism and the tone of the report. They are projecting a growth target of five percent, which is on the optimistic side. The consensus forecast is about 4.5 percent. In AMRO, our own forecast is 4.8 percent, it's slightly below the target, but within the range. But I think this five percent target is achievable, simply because I think the Chinese policymakers see a lot of fiscal policy space. So, if they need to, they can always, you know, do more to support the economy, just like what they did last year and the year before. Of course, we know that they're in the middle of a tariff war with the U.S., and so the headwinds can get stronger. But our own simulation shows that, you know, provided China doesn't respond in kind, meaning that they don't respond similarly by imposing very heavy tariffs on imports on the U.S., then the impact on the Chinese economy will be quite small."

MIRO LU Singapore "I think a lot of analysis about China's response during this Trump 2.0 is very measured, as you mentioned. And many people are waiting for China to bring out the bazooka kind of stimulus during the Two sessions. But we haven't seen that."

HOE EE KHOR Chief Economist ASEAN+3 Macroeconomic Research Office "I think the approach taken by the policymakers is about right, I think we also don't agree with the bazooka approach. We think the economy is fundamentally sound. Of course, there are weaknesses in the economy, mainly because of the real estate sector, okay, which is a drag on the economy. But other than that, you look at manufacturing, you look at other parts of the economy, they are all quite sound. The banking sector is fine. So, we think that policy makers should actually enact measures, but in a very measured and targeted manner, and then see how effective it is. If it is not sufficient, then they can always do more, rather than have a very big bazooka approach."

MIRO LU Singapore "One of the weaknesses, if we may say, about the Chinese economy right now is domestic consumption. And you mentioned the property market slump, and that, in a way, is linked to consumer sentiment being low. How do we address that consumption issue?"

HOE EE KHOR Chief Economist ASEAN+3 Macroeconomic Research Office "The bigger drag on consumer sentiment, I think, is the real estate sector, because property prices have declined. On top of that, because, you know, the property sector is weak. There is no demand for durable goods, appliances, furniture and all that. And our study on the real estate sector has been that, you know, it's been almost three, four years now, and it's beginning to turn around. So, it's in what we call the recovery phase. And we think that the recovery will take place maybe sometime in the middle of the year to the end of the year, in the second half of this year, it begins to turn around. And when that happens, then I think the sentiment will improve."