China Unveils 2025 Economic Roadmap with Focus on Growth, Innovation and Investment

Muhammad Zamir Assadi

China has set an economic growth target of around 5% for 2025, unveiling a roadmap centered on fiscal expansion, technological innovation, and foreign investment. Premier Li Qiang presented the government work report at the opening of the third session of the 14th National People's Congress (NPC) on March 5, outlining a comprehensive approach to sustaining economic momentum amid global uncertainties.

Fiscal Expansion

A key feature of China's 2025 economic strategy is an expansionary fiscal policy, with the deficit-to-GDP ratio set at 4%, marking a notable increase from the previous year. To support economic stimulus, the government plans to issue 1.3 trillion yuan in ultra-long special treasury bonds, up by 300 billion yuan from last year, along with 4.4 trillion yuan in local government special-purpose bonds, representing a 500 billion yuan increase over 2024 levels.

This fiscal expansion is designed to boost domestic consumption. Of the ultra-long special treasury bonds, 300 billion yuan will be allocated to consumer goods trade-in programs. Tian Xuan, deputy to the 14th NPC and associate dean at the PBC School of Finance, Tsinghua University, emphasized the significance of this initiative: “Expanding domestic demand is the top priority among the ten key tasks outlined in the government work report. The dedicated 300 billion yuan for trade-in programs will not only stimulate consumption but also drive the transformation and upgrading of consumption patterns.”

Hong Kong's deputy to the NPC, Ronick Chan Chun-ying, an advisor at Bank of China (Hong Kong) Limited, expressed confidence in the economic target, stating, “China has consistently sustained medium-to-high-speed economic growth, and its ability to maintain a 5% growth rate demonstrates the country's confidence, which in turn strengthens our own confidence.”

Driving Innovation with Emerging Technologies

China is prioritizing technological advancements in biomanufacturing, quantum computing, embodied AI, and 6G. The “AI Plus” initiative aims to integrate digital technologies with manufacturing strengths, supporting the extensive application of large-scale AI models and the development of next-generation intelligent terminals and smart manufacturing equipment.

Chan pointed out, “The emergence of Deepseek has demonstrated that we can achieve global AI capabilities using cost-effective chips and faster processing speeds.”

Solheim identified “stability” and “innovation” as the key themes of this year’s Two Sessions. “China is at the forefront of innovation, particularly in the two most important sectors – economy and environment,” he said, adding that stronger cooperation between Europe and China is essential amid uncertainties from Washington.

Patrick Nijs, co-founder of the EU-China Joint Innovation Center, emphasized the need for structured collaboration between Europe and China in tackling climate change and industrial cooperation. He pointed to sustainable agriculture projects in Yunnan Province, where initiatives such as organic farming and eco-communities are setting global benchmarks for sustainability.

Echoing this sentiment, Mendia stressed the importance of preventing technological decoupling between global powers, noting, “The world is becoming more balanced, and it is critical to ensure continued collaboration on innovation and sustainability.”

Strengthening Foreign Investment and Economic Openness

China is reinforcing its commitment to high-standard opening-up, stabilizing foreign trade, and advancing Belt and Road cooperation. Erik Solheim, former United Nations Under-Secretary-General and former Executive Director of the UN Environment Programme, remarked, “In this period of enormous global uncertainty, China remains a significant stabilizing force in the world economy. With an expected economic growth of around 5% for 2025, China will continue to be the biggest source of global economic growth.”

Bernardo Mendia, Board Advisor at the EU Young Entrepreneurs Association, highlighted China’s economic transition from a labor-intensive model to one driven by capital and technology. “The planned measures to stimulate domestic consumption and incentives for skill development provide strong endogenous power for long-term growth,” he said.

China has also announced plans to open up internet-related and cultural sectors while expanding trials in telecoms, medical services, and education. Foreign investors will be encouraged to increase reinvestment in China and collaborate with upstream and downstream enterprises in industrial chains.

David Perez-Des Rosiers, Director of the Canada-China Business Council Beijing Chapter, emphasized the attractiveness of China’s business environment: “China's commitment to expanding service sector openness and attracting foreign investment offers a positive perspective for Canadian businesses, particularly in services and education, which form a large part of Canada-China bilateral business.”