China’s Economic Priorities for 2025: Key Highlights from the Two Sessions

China’s top policymakers outlined their 2025 priorities during the “two sessions,” emphasizing a 5% GDP growth target, boosted innovation, and reduced export reliance. Key plans include a guidance fund for industries, tech sector support, stabilizing the yuan, and measures to curb local debt. They aim to foster growth, tackle trade challenges, and strengthen financial stability.

China’s top economic policymakers gathered on Thursday during the “two sessions,” the annual meeting of the country’s leading legislative and consultative bodies, to present their vision and priorities for 2025. This significant event brought together key figures from the National Development and Reform Commission (NDRC), the Ministry of Finance, the Ministry of Commerce, the central bank, and the securities regulator.

Zheng Shanjie, chairman of the NDRC, conveyed confidence in China’s ability to achieve its 5% GDP growth target for the year. He emphasized the economy’s steady foundation and upward momentum, highlighting that “new industries and business modes” now account for 18% of the country’s economy. To further encourage industrial innovation, the government plans to launch a “guidance fund” aimed at boosting transformation and upgrading.

Commerce Minister Wang Wentao acknowledged the challenges faced by Chinese exports and outlined measures to stabilize foreign trade, including support for cross-border e-commerce businesses investing in overseas warehouses. While officials reiterated that “there are no winners in a trade war,” they made it clear that China would not yield to external pressures. Wang criticized the United States for “distorting the truth” on fentanyl and noted that China’s dependence on exports to the West has declined. He pointed out that trade in services now exceeds 1 trillion yuan, with over half of China’s imports and exports linked to countries participating in the Belt and Road Initiative.

Finance Minister Lan Foan underscored China’s readiness to counter external uncertainties, citing the country’s ample “reserves” to implement additional supportive measures if needed. Technology remains a key focus, with fiscal spending on the sector projected to exceed 1.2 trillion yuan this year, an 8.3% increase from 2024.

Central bank governor Pan Gongsheng highlighted the potential for further reductions in the reserve requirement ratio and announced plans to lower interest rates at an “appropriate time” later in the year. He also committed to maintaining a stable yuan exchange rate, warning against exchange rate overshooting amid recent pressures from the intensifying U.S.-China trade dispute.

China is accelerating its efforts to support the tech sector, with officials emphasizing rapid progress in innovation despite external challenges. “The more certain forces attempt to suppress and blockade us, the faster we will advance independent innovation,” Zheng remarked. The central bank plans to double its relending tool for the tech industry, increasing it from 500 billion yuan to 1 trillion yuan. Pan also welcomed foreign investment in Chinese tech firms and criticized “unjust investment barriers.”

Zheng also highlighted the government’s focus on boosting domestic consumption, committing to double the issuance of long-term bonds for consumer goods trade-in programs to 300 billion yuan. Efforts to attract foreign tourists will intensify, with Commerce Minister Wang outlining plans to improve visa policies, online payment systems, and other services to make China more appealing to international visitors.

Wu Qing, chairman of the China Securities Regulatory Commission, detailed measures to clean up the stock markets, including cracking down on financial fraud, insider trading, and market manipulation. To build investor confidence, the government is injecting fresh capital into the markets and introducing monetary policy tools designed for the capital market.

Addressing local government debt, Finance Minister Lan stressed the enforcement of an “iron rule” prohibiting the addition of new hidden debt this year. He noted that local government financing vehicles—previously a significant source of implicit debt—have declined significantly and outlined plans to transition these entities toward new business models.

Pan also discussed measures to mitigate risks in small banks and the property market. He noted that the number of high-risk banks has halved from its peak. Additionally, China will closely monitor global financial markets to address potential spillover risks. Pan expressed confidence in the central bank’s ability to maintain stability in the foreign exchange market.

Overall, China’s economic leaders showcased a unified and forward-thinking approach to addressing both domestic and global challenges. Through a combination of targeted policies and strategic investments, they reinforced their commitment to driving growth, innovation, and economic stability in 2025.