By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. December 19, 2024. Article no 1342.

Following the results of the Chinese state annual central meeting on economic work, which this time was held in Beijing on December 11 and 12 with the participation of members of the Politburo of the Communist Party of China and the State Council, the Chinese authorities have set a growth target of approximately 5% for 2025, maintaining the same benchmark as the previous year.

Concurrently, the country plans to increase its budget deficit to a record 4% of GDP in response to ongoing economic challenges and to stimulate economic growth.

Growth Target: The Chinese government aims for a 5% growth rate, which is seen as a reflection of confidence in the economy despite recent slowdowns. This target was discussed during a recent economic conference attended by top officials, including President Xi Jinping.

Budget Deficit: The decision to raise the budget deficit to 4% of GDP marks a significant fiscal policy shift aimed at providing more room for economic stimulus. This increase is intended to support government spending and investment in infrastructure, which are crucial for boosting domestic demand and stabilizing the economy.

Economic Context: China’s economy has faced numerous challenges, including sluggish domestic demand, an ongoing property market crisis, and potential trade tensions with the incoming U.S. administration. Analysts predict that achieving the growth target will require decisive actions, particularly in stabilizing the property sector and enhancing consumer spending.

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Policy Measures: To support these targets, China plans to adopt a more proactive fiscal policy and maintain an “appropriately loose” monetary policy. This includes potential interest rate cuts and increased government borrowing to ensure adequate liquidity in the economy.

Overall, these measures reflect China’s strategy to navigate through economic uncertainties while aiming for stable growth in 2025.

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© Copyright 2024 – Eurasia Business News. Article no. 1342.