Key takeaways of China's 2025 Government Work Report

Hi everyone. I’m Stephanie LI.Coming up on today’s programChina sets major targets for 2025, including 5% GDP growth and 4% deficit-to-GDP ratio;First “Ministers’ Passage” opens for interviews today at the Two Sessions.China’s Annual Two Sessions 2025China has set an economic growth target of "around 5 percent" for 2025, the same as last year's figure, as the world's second-largest economy emphasizes expanding domestic demand with more supportive policies, according to the Government Work Report released on Wednesday.Premier Li Qiang, who delivered the report at the opening of the third session of the 14th National People's Congress in Beijing, pledged that the country will pursue a more proactive fiscal policy and exercise a moderately loose monetary policy this year.Li said the government has set a projected deficit-to-GDP ratio for 2025 at 4 percent, up from 3 percent for 2024. The government started to release the annual projected deficit ratio in 2010, with the highest reading in 2020 at 3.6 percent as COVID-19 hit, according to market tracker Wind Info.The work report also said China will issue 1.3 trillion yuan in ultra-long-term special treasury bonds this year, up from 1 trillion yuan for 2024. This year's quota of special local government bonds will be increased to 4.4 trillion yuan from a record high of 3.9 trillion yuan last year.The government will launch special initiatives to boost consumption in 2025, including issuing ultra-long special treasury bonds of 300 billion yuan to support consumer goods trade-in programs, according to the work report.This year, China, as laid out in the report, plans to target a surveyed urban unemployment rate of around 5.5 percent, the creation of over 12 million urban jobs, and consumer price index increase of around 2 percent.Meanwhile, the report highlighted the development of new quality productive forces, with the aim to foster strategic emerging industries and future industries. Key initiatives include advancing commercial space, fostering the low-altitude economy, and establishing a funding mechanism for bio-manufacturing, quantum technology, AI, and 6G.The report said authorities will unleash the digital economy under its AI Plus initiative, which will work to combine digital technologies with China’s manufacturing and market strengths.As for the private sector, Li pledged to better support the private economy and bolster business confidence. The country would strengthen legal protections and policy support for private enterprises, ensuring their legitimate rights, as well as curbing profit-motivated law enforcement against private companies.Also, China would persistently stick to its opening-up policy, which would lead to more reforms and development opportunities. The nation will encourage foreign investors to expand their investments in China and cooperate with companies up and down the industrial supply chain.Two Sessions highlightsChina has emerged as the world's busiest country in terms of passenger and cargo movements, thanks to the rapid growth of its transport, China's Transport Minister, Liu Wei, said on Wednesday after the opening meeting of the 14th National People's Congress' third session. "China's high-speed railways, roads, bridges, ports and express delivery services have become shining symbols of the country's modernization," Liu said, pointing to the country's remarkable achievements in infrastructure. China has built the world's largest high-speed railway network, expressway network, postal and express delivery network, and a world-class port cluster, Liu said. The country's high-speed railway network now spans 48,000 kilometers, and its expressway network extends over 190,000 kilometers, both ranking first globally. China’s Minister of Education Huai Jinpeng said at today's "Ministers' Passage” on the sideline of the ongoing Two Sessions that DeepSeek and robots have attracted extensive attention at home and abroad in recent times, which also illustrates the effects of China's scientific and technological innovation and talent cultivation from one aspect. Huai said that a series of national special actions will be launched this year to better accelerate and strengthen talent cultivation in the process of serving national strategies and scientific and technological development.China will optimize regulations to promote the healthy development of the platform economy, Luo Wen, Director of the State Administration for Market Regulation, said at today’s "Ministers' Passage”. Luo also vowed to regulate the live-streaming e-commerce sector by strengthening platform's review responsibilities and conducting more random inspections, as to maintain a fair and competitive order and improve the quality of online products.Li Yunze, Director of the National Financial Regulatory Administration, said at the "Ministers' Passage” a total of 3.8 trillion yuan of non-performing assets were disposed of last year, reaching the highest level in history, and the bottom line of preventing systemic risks was firmly held. Li vowed to support the stable development of the real estate market, expand the "white list” and ensure the delivery of completed housing. Li also said the administration will encourage banks to increase credit limit and extend the term of consumer loans in order to support residents’ needs of long-term, large amount consumption.Technological innovation plays a key role in transforming industries and expanding emerging ones, Xiaomi’s founder and NPC deputy Lei Jun said at the Two Sessions today. Five years ago, Xiaomi pledged to invest 100 billion yuan in core technologies, and now, after having invested 105 billion yuan, the company has experienced a significant transformation, driven by R&D, Lei noted.Heightened efforts are needed to allow more households in townships and counties to enjoy consumption-friendly subsidies from the consumer goods trade-in program, and reinforce the dominant position of enterprises in technological innovation, said Jia Shaoqian, chairman of Chinese home appliance manufacturer Hisense Group, who is also a deputy to the 14th National People's Congress. In the fourth quarter of last year, sales of Hisense's home appliances surged more than 30 percent year-on-year fueled by the trade-in program, Jia said.Many enterprises are accessing AI large language model platforms after DeepSeek released its DeepSeek R1 large model in January, said Yang Chengzhang, member of the CPPCC National Committee and chief economist of Shenwan Hongyuan Securities at the Two Sessions. He stated that the country should take science and technology as the driving forces, greening as the orientation, and strengthen the application of digitalization and artificial intelligence to promote the development of the private economy.Promoting China's independent PV innovation and the development of original technology is the top priority in the country's green development, Zhong Baoshen, an NPC deputy and chairman of Longi Green Energy Technology Co said on Tuesday. The PV industry is still facing challenges such as supply-demand mismatch and involution-style competition, so strengthening the capability of independent innovation and developing original technology is an inevitable choice to break through the current bottleneck, Zhong said.Next on industry and company newsHuawei's Harmony Intelligent Mobility Alliance will release a revamped version of the Aito M9 this month and the Aito M8 next month, Richard Yu, chairman of Huawei's Smart Auto Solutions BU, said on Weibo today.Liu Jiakun has won the 2025 Pritzker Architecture Prize, the highest honor in the field, becoming the second Chinese architect to receive the honor after Wang Shu in 2012. Based in Chengdu, Liu's career spans over four decades, with more than 30 projects ranging from academic and cultural institutions to civic spaces, commercial buildings, and urban planning throughout China.Wrapping up with a quick look at the stock marketChinese stocks rose on Wednesday. The benchmark Shanghai Composite gained 0.5 percent and the Shenzhen Component added 0.3 percent. Hong Kong’s Hang Seng index jumped 2.8 percent and the TECH index rallied 4 percent.