Banca March | China sets growth target for 2025 at 5%, with budget deficit rising to 4% (from 3% in 2024). The The government document presented by Prime Minister Li Qiang to parliament sets the GDP target at 5% for the third consecutive year, a demanding goal that will require more aggressive stimulus measures. The focus is on strengthening consumption and counteracting deflationary pressures – the government has lowered its inflation target to around 2%, the lowest since 2003. Li announced a plan to issue ¥1.3 trillion (US$179 billion) in special ultra-long treasury bonds this year (versus ¥1 trillion in 2024). ¥300 million will be used to finance the consumer subsidy programme. The rest of the money will be used for the construction of infrastructure projects and to encourage companies to update their equipment. Another ¥500 billion in special treasury bonds will be issued to support large state-owned commercial banks. Local governments will be allowed to issue ¥4.4 trillion in special debt (versus ¥3.9 trillion in 2024).
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