China’s National People’s Congress: Key Priorities and Challenges
The National People’s Congress (NPC) of China commenced its annual session in Beijing, outlining the government’s strategic priorities for the upcoming year. Premier Li Qiang presented the work report, focusing on stabilizing the economy, advancing artificial intelligence (AI), and addressing critical issues such as the property market slump and rising government debt.
Economic Growth and Trade Challenges
China has set an economic growth target of "around 5%" for 2025, consistent with previous years. The report highlighted the impact of trade tensions with the U.S., with potential tariffs threatening to reduce growth by up to 1.1 percentage points. Premier Li emphasized the complex external environment, noting geopolitical tensions and tariff barriers as significant challenges.
Boosting Consumption and Targeted Measures
With domestic demand and consumption flagging, the government aims to stimulate spending through measures like increasing the fiscal deficit ratio and introducing trade-in programs for consumer goods. These initiatives seek to counter deflationary pressures and bolster economic stability amidst a sluggish property market.
AI and Technological Self-Reliance
Technological self-reliance is a priority for President Xi Jinping, driven by U.S. restrictions on advanced technologies like semiconductors. The report underscored support for AI development in smart manufacturing, new-energy vehicles, and robotics, aiming to enhance innovation and reduce reliance on foreign technologies.
Tackling Property Slump and Local Debt
The government addressed the deepening property market crisis and local government debt. Measures include lifting property transaction restrictions and ensuring housing project delivery. Premier Li also highlighted efforts to manage hidden local debts, crucial for maintaining fiscal stability.
Defense Spending and Taiwan Policy
China announced a 7.2% increase in defense spending, consistent with last year’s budget. The report reiterated Beijing’s commitment to asserting territorial claims, particularly regarding Taiwan, opposing separatist activities and external interference, reflecting China’s strategic priorities in regional security and unity.
