China is ending its annual Congress with questions open over how to
revive its slowing economy
[March 11, 2025] By
KEN MORITSUGU and SIMINA MISTREANU
BEIJING (AP) — China wrapped up its biggest political event of the year
on Tuesday leaving one question unanswered: How far will it go to try to
revive economic growth in 2025?
A recurring theme throughout the weeklong meeting of the nearly
3,000-member National People’s Congress was the need to boost investment
and consumer spending.
How much will be done to translate words into action will only become
clear in the months ahead as the ruling Communist Party juggles
priorities. What is clear is that a burgeoning trade war with the United
States has left the outlook for the coming months uncertain.
The meeting ended in the absence of top political leader Zhao Leji, the
chairman of the Standing Committee of the Congress. Zhao, who was
supposed to host the closing session, had a respiratory tract infection,
said Vice Chairman Li Hongzhong, who chaired the meeting in his place.
The rubber-stamp parliament voted overwhelmingly to approve an annual
government work report, with 2,882 votes for, one vote against and one
abstention. Similar near-unanimous votes were recorded to pass the
budget and an amendment to a law on deputies to the Congress, among
other items.
At stake is the health of the world's second largest economy, a major
exporter of products to countries around the world and an important
market for foreign companies from Apple to Volkswagen. A prolonged
property crisis has sapped consumer and business confidence, depriving
the economy of its past vitality. Now, a tariff war unleashed by U.S.
President Donald Trump is compounding those problems.
China holds back on major stimulus — for now
The Congress opened with the announcement of an economic growth target
of "about 5%” for this year, a level that analysts said would be
difficult to achieve with the measures detailed during this year's
Congress.
They include borrowing more money for a slew of initiatives, such as
giving 300 billion yuan ($41.3 billion) in rebates to consumers who
trade-in old cars and appliances for new ones. But much of the borrowing
will go to supporting the housing market and local governments weighed
down by debt.
“It is unclear how much of a jolt this budget will provide to underlying
domestic demand and reflation efforts, despite the sizeable rise in the
deficit,” Jeremy Zook, the lead China analyst for Fitch Ratings, said in
a report.
The ambitious 5% growth target signaled to analysts that more stimulus
may be coming. Last year, the government surprised stock markets with
various moves beginning in September to push growth up to 5%, also the
target in 2024.
Finance Minister Lan Fo’an told journalists covering the Congress that
the government had sufficient tools in reserve to deal with external or
domestic uncertainties.
Xi seeks private sector help, within limits
Chinese President Xi Jinping seems bent on reinvigorating private
businesses, which provide a large share of growth and jobs in the
country's state-dominated economy. Years of regulatory crackdowns have
shaken the confidence of entrepreneurs and other investors.
The Congress reviewed comments on a proposed law meant to improve the
environment for private enterprises by regulating aspects of market
access, financing, competition and property rights protection, among
others. The legislation was not put to a vote.
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China's top leaders stand for the national anthem during the closing
ceremony of the National People's Congress held at the Great Hall of
the People in Beijing, Tuesday, March 11, 2025. (AP Photo/Ng Han
Guan)
 Xi aims to send a “message to
entrepreneurs, but also to local governments and regulators, that
the private sector’s important and it’s necessary,” Neil Thomas, a
fellow on Chinese politics at the Asia Society Policy Institute,
said ahead of the congress.
Private companies will also gain access to a higher share of loans
than before, and financing for private businesses raised through
bond issuance will be expanded, Chinese Premier Li Qiang said in the
work report.
The foreign minister says the US shouldn't bully
Much rides on how far Trump pursues his trade wars with China and
other countries.
China has diversified its export markets in recent years, but the
U.S. remains a vital trading partner. The greater fear is not the
tariffs themselves but the health of the U.S. economy and demand for
Chinese products, said Alicia Garcia Herrero, the chief Asia-Pacific
economist for Natixis investment bank.
Trump has raised tariffs on imports from China twice since taking
office in January. China has shown no sign of backing down.
“If the American side goes further down this wrong path, we will
fight to the end,” Commerce Minister Wang Wentao told journalists
during the Congress.
Asked about Trump’s “America First” policy, China’s Foreign Minister
Wang Yi said the law of the jungle would reign if all countries
adopted a “my country first” approach.
“A big country should honor its international obligations and
fulfill its due responsibilities,” he said to journalists at the
Congress. “It should not put selfish interests before principles,
still less wield its power to bully the weak.”
A Chinese buzzword makes a comeback
The government said in its annual report that it would address what
it considers unproductive “rat-race” competition, invoking a term
that was a buzzword in China five years ago among stressed-out
younger workers.
The government is applying the term “neijuan” — more commonly
translated as “involution” — to companies and local governments
rather than workers. A proliferation of green energy firms, for
example, has led to gluts in solar panels and other equipment and
fierce price wars that ultimately harm the industry.
“Their strategies are similar, which leads to extremely cruel
competition,” Chinese tech leader Lei Jun, the CEO of Xiaomi and a
delegate to the Congress, told state media.
The solutions are unclear, experts say, noting that government
subsidies for green energy helped create the problem by encouraging
so many start-ups.
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Associated Press writer Fu Ting in Washington and researcher Shihuan
Chen in Beijing contributed.
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