China to tackle issues from multiple fronts

Economic growth takes center stage in the 2025 Government Work Report presented by Chinese Premier Li Qiang at the two sessions on March 5, said Jon Taylor, a political science professor at the University of Texas at San Antonio.

"Li's government work report pledged more aggressive spending to drive growth, noting that all parties should work hard to achieve the 'very challenging' goal, given an 'increasingly complex' external environment," Taylor said.

He said that while China "can rightly celebrate stable economic growth in 2024, exemplified by the 5 percent year-on-year GDP growth rate and stable levels of inflation and unemployment, there is a real need to boost consumer consumption and stimulate domestic demand".

Taylor mentioned that Premier Li emphasized vigorously boosting consumption and investment returns to stimulate domestic demand by developing new quality productive forces and a modernized industrial system.

Li talked about boosting the country's science, education and innovation, pursuing economic structural reform, and opening up and stabilizing foreign trade and investment. Risk management, rural vitalization, carbon emissions reduction, green development, social development and social governance are all part of the package. China is tackling the issues from multiple fronts, Taylor said.

"These priorities are quite ambitious. Reading through the Government Work Report, it's clear that China's leadership is aware of the challenges ahead. Clarity of thought and purpose is crucial in developing policies that will address the economic headwinds that the nation faces," Taylor added.

He pointed out that China needs to encourage domestic demand, particularly consumption.

The government is formulating measures to fix this, said Taylor, including raising the fiscal deficit ratio to 4 percent (from 3 percent last year), and issuing ultra-long special treasury bonds totaling 300 billion yuan ($41.3 billion) to finance China's ambitious old-for-new initiative to spur economic growth.

"Premier Li stated that China will 'make continued efforts to stem the downturn and restore stability in the real estate market'. In real-world terms, this means offering concrete policies to address concerns about property transaction restrictions and leveraging real estate financing to ensure the timely completion of housing projects. Mounting local government debt, primarily the hidden debts of local governments, will also be targeted," he said.

Taylor said other policy initiatives are equally worth noting.

"Li highlighted China's advancements in production and industrial upgrades — including record grain output and stronger yields through an emphasis on agricultural development and rural revitalization. There was a strong emphasis on new quality productive forces, particularly tied to China's efforts to achieve technological self-reliance and break through the containment and suppression imposed by the US."

Taylor said China plans to develop major projects related to climate change, and the government will support and encourage private investment in major infrastructure and public well-being projects.

"China's annual Government Work Report is a comprehensive document that, admittedly, requires time to read and assess," Taylor said.

"Regardless, this year's report signals that the central government has confidence in stabilizing China's economic growth in the face of external headwinds such as US tariffs and sanctions. Laying out a plan to maintain 5 percent annual growth demonstrates a commitment to ambitious policies that will encourage consumer spending, ensure the private sector, and enhance both market stability and economic growth."

mayzhou@chinadailyusa.com