Policy moves renew 'sense of confidence'

China's new policy push outlined in the 2025 Government Work Report for boosting domestic consumption, expanding fiscal spending and advancing opening-up has highlighted its economic prospects and more opportunities for foreign businesses, according to foreign experts.

Jelena Grubor Stefanovic, director of the representative office of the Serbian Chamber of Commerce and Industry in China, said the report, delivered by Premier Li Qiang on March 5 at the opening of the third session of the 14th National People's Congress, China's top legislature, offered a "candid assessment" of where the country currently stands, and sent an "encouraging" sign for China-based foreign businesses.

"The focus on expanding fiscal spending and boosting domestic consumption is a clear sign that China is committed to stabilizing the economy and fostering sustainable growth," she said. "This provides a positive environment for foreign businesses indeed, as it could translate into more opportunities in sectors directly benefiting from increased government spending, such as consumer goods, technology, green energy and infrastructure."

According to the report, China has set its deficit-to-GDP ratio at around 4 percent for 2025, an increase of one percentage point from last year, and a total of 1.3 trillion yuan ($179 billion) of ultra-long-term special treasury bonds will be issued, 300 billion yuan more than last year.

Stefanovic added that the premier's remarks on China's pledge to further open up reassured foreign investors.

Despite global uncertainties, China's focus on expanding foreign investment and creating new development opportunities signals that it is "determined to maintain its role as a key player in the global economy and global supply chains. This commitment is reassuring for foreign businesses, especially those looking for a stable and transparent environment in which to scale and innovate," she said.

Stefanovic said she has noted a "renewed sense of confidence" on the ground with the fresh policy rollout, while foreign businesses are also closely monitoring the situation and expecting effective policy implementation, particularly in terms of regulatory clarity and market access, and whether fiscal spending can effectively stimulate consumption demand.

Jostein Hauge, assistant professor at the University of Cambridge's Centre of Development Studies, said that while prioritizing domestic consumption — an area that still accounts for a relatively low share of China's GDP — is seen as a reasonable move to further drive the country's economy, the shift does not necessarily mean that past growth, led by investment and exports, is problematic, nor does China's manufacturing capability constitute a so-called "overcapacity".

"Embarking on a path of creating trade surpluses is a strategy that one should want to embark on, especially from the perspective of national economic development," he said. "In that sense, China has simply done what you want all developing countries to do."

"At some point, you'd expect China to start consuming more. Of course, given some of the domestic challenges, sectors would all benefit from stronger consumption" and the measures that aim to try to strengthen the domestic economy, Hauge said. "What does it really mean to have 'overcapacity'? Does it simply mean producing more than you domestically consume? This is what we call export-led development or what we used to call export-led development in a lot of sectors."

Hauge also noted that the rhetoric about "overcapacity" was somehow hyped up only when China began exporting competitive advanced manufacturing products, such as those in the "new three" sectors of photovoltaics, lithium batteries and electric vehicles.