China targets 'around 5%' GDP growth in 2025 and lays out stimulus measures as trade worries mount

cnbc.com:

China on Wednesday set its GDP growth target for 2025 at «around 5%» and laid out stimulus measures to boost its economy amid escalating trade tensions with the U.S.

Beijing raised its budget deficit target to «around 4%» of GDP from 3% last year, according to the official report, as the country's top legislative body held its annual meeting.

The 4% deficit would mark the highest on record going back to 2010, according to data accessed via Wind Information. The prior high was 3.6% in 2020, the data showed.

The government report outlined plans to issue 1.3 trillion yuan ($178.9 billion) in ultra-long-term special treasury bonds in 2025, 300 billion yuan more than last year. Another 500 billion yuan worth of special treasury bonds will be issued to support large state-owned commercial banks.

The widened fiscal package also includes the issuance of 4.4 trillion yuan of local government special-purpose bonds this year to help ease their financing strains.

In an implicit acknowledgement of sluggish domestic demand, Beijing revised down its annual consumer price inflation target to “around 2%” — the lowest in more than two decades — from 3% or higher in prior years, according to the Asia Society Policy Institute.

The new inflation goal would act more as a ceiling than a target to be realized. Consumer prices climbed just 0.2% in 2024 and 2023, while producer prices have declined for over two years.

While emphasizing boosting domestic consumption as a top priority, Beijing vowed to expand the consumer goods trade-in program with an additional 300 billion yuan in ultra long special treasury bonds.

China seeks to keep the urban unemployment rate, which stood at 5.1% last year, at around 5.5% and add more than 12 million jobs in