Reading the Tea Leaves Inside the China Work Report 2025
Introduction
On 5 March 2025 at the Great Hall of the People in Beijing, Premier Li Qiang delivered the China Work Report 2025 (#CWR2025) at the Third Session of the 14th National People’s Congress (NPC). China aims to maintain steady growth and stability while advancing modernization.
2025 marks the final of the 14th Five-Year Plan and the Government of China seeks to deepen reforms, stabilize the real estate and stock markets, manage risks and external shocks, with the goal of supporting economic recovery and improving people’s living standards. It will lay a solid foundation for the transition into the 15th Five-Year Plan.
Review of 2024
- Economic Growth: GDP reached 134.9 trillion yuan, growing by 5%, contributing 30% to global growth.
- Employment: 12.56 million urban jobs created, surveyed urban unemployment at 5.1%
- Inflation: CPI rose by 0.2%
- Disposable Income: +5.1%
- Foreign Trade & Reserves: Trade hit a record high, and foreign exchange reserves stayed above $3.2 trillion.
- Industrial & Technological Advances: Growth in high-tech sectors, AI, quantum technology, and space exploration (e.g., Chang’e-6 lunar mission).
- Environmental Progress: PM2.5 levels reduced, renewable energy capacity increased, and national parks expanded.
- Reforms & Opening Up: Government restructuring, retirement age reforms, full foreign investment access in manufacturing, and Belt & Road Initiative expansion.
Production and Value Addition in 2024
- Grain production: Over 840 million tonnes
- Electric Vehicle (#EV) production: Over 13 million vehicles
- Hi-tech manufacturing value-add: +8.9%
- Equipment manufacturing value-add: +7.7%
- Software and IT services value-add: +10.9%
- Leasing and business services value-add: +10.4%
- Energy consumption per unit of GDP: -3%
- Renewable energy installed capacity: +370 MW
Goals & Policies for 2025
- GDP Growth: Around 5%.
- Urban Job Creation: Over 12 million new urban jobs.
- Inflation: CPI around 2%.
- Fiscal Policy: Increase government spending, with a deficit-to-GDP ratio of 4% and the issuance of ultra-long-term bonds.
- Monetary Policy: Adjust interest rates and increase financing support for real estate, stock markets, and private businesses.
- Grain Production: Around 840 million tonnes
- Energy consumption per unit of GDP: Reduce by about 3%
- Military Spending: 7.2% Increase for modernization and combat-readiness.
Major Priorities for 2025
- Boosting Consumer Spending and Sentiment: Stimulating consumption and private investment, upgrading household incomes, and promoting high-end consumer goods.
- Upgrading Industrial & Technological Capabilities: Advancing #DigitalEconomy, specifically in the field of AI, quantum technology, 6G, and space exploration while upgrading traditional industries.
- Promoting science and innovation: Accelerating the implementation of a high-quality education too achieve technological self-reliance and develop local talent
- Expanding Opening Up: Easing foreign investment restrictions, improving trade policies, and strengthening Belt and Road Initiative (#BRI) partnerships.
- Deepening reforms: Deepening reforms of thee fiscal, monetary and financial systems in order to stimulate businesses and economic growth
- Financial & Debt Risk Management: Strengthening financial regulations, addressing local government debt, and stabilizing the real estate sector.
- Rural Revitalization & Food Security: Supporting agriculture, increasing rural incomes, and securing grain output.
- Urbanization & Regional Development: Expanding infrastructure, improving housing policies, and balancing economic growth between regions.
- Environmental Protection & Green Development: Reducing carbon emissions, promoting renewable energy, and enforcing stricter pollution controls.
- Social Welfare & Public Services: Expanding healthcare, education, and elderly care, with pension and social security reforms.
- National Security & Social Stability: Strengthening public safety, disaster management, and cyber regulations.
Sustainable Development
- #NetZero Target: 2060
- Promote new growth sectors such as Green Buildings and Low-Carbon Technologies
- Enhance policies and standards for #GreenEconomy
- Improve energy and water consumption management
- Expand carbon emission trading
- Deploy large-scale offshore wind farms and solar farms in desertic areas
Encouraging FDI
- Further allow foreign investment into key sectors such as technology, healthcare, education, and advanced manufacturing
- Implement and promote the Hainan Free Trade Port and other Free Trade Zones as areas with supporting policies to attract #FDI
- Leverage partnerships such as the China-ASEAN #FTA, Trans-Pacific Partnership (TPP) and Digital Economic Partnership
Debt and Bond Issuance
- Budget Deficit: RMB 5.66 trillion, representing 4% and up by 1% from 2024
- National Expenditures: RMB 29.7 trillion, an increase of RMB 1.2 trillion from 2024
- Ultra-long-term special government bonds: Issue RMB 1.3 trillion, an increase of RMB 300 billion from 2024
- Special government bonds: Issue RMB 500 billion to support capital replenishment for large state-owned commercial banks
- Local government special-purpose bonds: Issue RMB 4.4 trillion, an increase of RMB 2.9 trillion from 2024
- Government debt: RMB 11.86 trillion, an increase of RMB 2.9 trillion from 2024
Conclusion
The report emphasizes China’s commitment to high-quality development, technological innovation, and economic resilience. It also highlights the need to manage risks, improve social services, and advance global cooperation.
In light of the unfavorable external environment for exports to certain major markets, China seeks to boost consumer confidence and domestic consumption At the same time, it is supporting champions in emerging sectors such as #AI and #EV.