Prime Minister Li Qiang announced the growth target in the government's annual work report, which also outlined a plan to stabilize economic growth by boosting domestic demand and creating 12 million new jobs in urban areas.
Economists see the 5% growth target as a challenge. China achieved a 5% target last year thanks to a 10.7% increase in exports in December, bringing the country's trade surplus to a record $1 trillion.
However, a new trade war between the US and China when President Donald Trump returns to the White House this year will make it difficult for China to boost the economy through trade.
This week, President Donald Trump has doubled tariffs on most Chinese goods to 20%, with some items set to be taxed up to 45%. China has announced the imposition of retaliatory tariffs, a tax of up to 15% on agricultural products imported from the US.
The Guardian said that China's challenge in 2025 is to protect the economy from the impact of a trade war. Economists have urged policymakers to increase stimulus, especially measures to help consumers earn more money to boost domestic demand.
In the working report on March 5, Prime Minister Li Cuong said that the government wants to "turn domestic demand into the main and foundation driver for economic growth". However, details about how to implement it have not been revealed much, except for the commitment to issue 300 billion yuan ($41.2 billion) of special treasury bonds to support consumer exchange programs. This is double the amount in last year's subsidy program, in which consumers can exchange old household appliances such as microwaves and rice cookers for discounts when buying new products. According to Chinese officials, last year's program brought in 240 billion yuan (33 billion USD) in household appliance sales.
Beijing is increasingly focusing on the need for domestic innovation development and high-tech industries, areas that Chairman Xi Jinping calls "new quality manufacturing forces".
Speaking to nearly 3,000 delegates gathered at the Beijing People's Street Festival to attend the opening session of the National People's Congress of China, Prime Minister Li Qiang affirmed that the government will "establish a mechanism to increase funding for future industries" such as artificial intelligence and 6G.
The annual session of the National People's Congress of China will last until March 11. The People's Political and Commercial Summit (PP) will also take place in Beijing this week.
Also on March 5, China announced a 7.2% increase in its defense budget this year, reaching about 245 billion USD. According to AP, China's military spending remains the world's second largest, after the US and China, which have the world's largest naval forces.
