Catenaa, Friday, November 22, 2024- Chinese government advisers have recommended setting a 5% economic growth target for 2025, proposing robust fiscal stimulus to counter the potential impact of U.S. tariffs under President-elect Donald Trump. Four out of six advisers favor the 5% goal, while others suggest slightly lower targets. The proposals will be discussed at the Central Economic Work Conference next month, with an official announcement expected in March.
Advisers emphasized the need to boost domestic demand to offset export challenges, advocating for a budget deficit exceeding this year’s 3% of GDP. Measures may include expanded subsidies, infrastructure spending, and stronger financial support for low-income households. However, some economists caution that reliance on stimulus could exacerbate debt and structural imbalances.
China’s ambitious target aligns with President Xi Jinping’s vision of doubling the economy by 2035, but external pressures, including trade barriers and deflation risks, pose significant challenges. The tariff threat has already pushed some manufacturers to relocate production abroad.
Advisers are divided on how aggressive policies should be, with some urging structural reforms to ensure long-term sustainability. China recently introduced a $1.4 trillion municipal debt package but has refrained from broader fiscal measures, signaling caution amid global uncertainty.
