China Sets 5% Growth Target Amid US Tariff Escalation
China: China has set an economic growth target of around 5% for 2025, despite challenges from a slowing domestic economy and escalating trade tensions with the US. The country faces persistent issues, including low consumption, a real estate crisis, and rising unemployment. The US imposed a new 10% tariff on Chinese imports, bringing the total levy to 20%, threatening China's export-driven growth. In response, China retaliated with 10%-15% tariffs on US agricultural goods.
To stimulate growth, China plans to boost domestic demand through fiscal measures, including issuing 1.3 trillion Yuan (USD 179 billion) in special treasury bonds and allowing local governments to borrow up to 4.4 trillion yuan (USD 608 billion). The fiscal deficit has also been raised to 4% of GDP, the highest in decades, signalling increased government spending. Additionally, 12 million new urban jobs will be created, with an unemployment target of 5.5%.
China is also focusing on high-quality development in AI, renewables, and high-tech industries, aiming to reduce reliance on Western technology. However, with growing global protectionism and trade restrictions, whether these measures will be enough to maintain economic stability remains uncertain.
Source: BBC