Full-text & highlights of government work report
China targets economic growth of around 5 percent in 2025
Chinese Premier Li Qiang, on behalf of the State Council, delivered a government work report at the opening meeting of the third session of the 14th National People's Congress (NPC), held at the Great Hall of the People on Wednesday morning.
According to the government report, China targets an economic growth of "around 5 percent” in 2025. A more proactive fiscal policy and an appropriately accommodative monetary policy will be adopted, with the ratio of deficit to gross domestic product (GDP) set at around 4 percent, an increase of one percentage point over last year. The country expects to create over 12 million jobs in urban areas and keep the surveyed urban unemployment rate at around 5.5 percent this year.
Domestic demand will be made the main engine and anchor of economic growth, the report said. Ultra-long special treasury bonds totaling 300 billion yuan will be issued to support consumer goods trade-in programs.
The central government expenditures are projected at 4.3545 trillion yuan, an increase of 6.9 percent this year.
The main expenditures are as follows: 64.506 billion yuan on diplomatic endeavors, up 8.4 percent; 1.784665 trillion yuan on national defense, up 7.2 percent; 242.828 billion yuan on public security, up 7.3 percent; 174.443 billion yuan on education, up 5 percent; 398.119 billion yuan on science and technology, up 10 percent; 131.66 billion yuan on stockpiling grain, edible oils, and other materials, up 6.1 percent; and 834.55 billion yuan on debt interest payments, up 10.2 percent.
We have uploaded the Report on the Work of the Government [Chinese] [English], the Report on China's national economic and social development plan [Chinese][English], and the Report on China's central and local budgets [Chinese][English] to Google Drive for you to download and share with others.
Please note that the official Chinese version of the reports will be released by Xinhua News Agency/此报告以本次大会最后审议通过并由新华社公布的文本为准.
Below are the highlights of the government work report delivered by Premier Li today. They are selected by me, focusing mostly on China's economic policies and the government's major tasks in 2025.
Five key relationships in economic work
One notable statement in the government work report highlights the need to properly handle five key relationships in economic efforts, echoing the central theme of a recent article in Qiushi, a flagship magazine of the CPC Central Committee. The article is part of Xi Jinping's remarks on the Chinese economy during the Central Economic Work Conference last December.
The five relationships are
1. 有效市场和有为政府 Between an efficient market and a well-functioning government
2. 总供给和总需求 Between aggregate supply and demand
3. 培育新动能和更新旧动能 Between fostering new growth drivers and upgrading old ones
4. 做优增量和盘活存量 Between optimizing allocation of new resources and making the best use of existing ones
5. 提升质量和做大总量 Between enhancing quality and expanding total output
These five points are crucial for the outside world to understand China's current approach to coordinated economic development.
Growth target and policy coordination
As I predicted in my previous newsletter on the "two sessions" preview, the Chinese government has set this year's economic growth target at around 5 percent. The government work report delivered by Premier Li this morning noted that achieving this year's targets “will not be easy and requires arduous efforts.”
According to Caixin, the "two sessions" are held against a more positive backdrop than the Central Economic Work Conference last December. The macro research team at China International Capital Corporation (CICC) pointed out that investors' sentiment has been influenced by China's recent economic growth and DeepSeek's success. However, considering short-term capital market performance, they noted that the "two sessions" are unlikely to change the outlook, which still anticipates downward pressure on the economy.
After going through the government work report, it seems clear that the authorities are well aware of the challenges ahead, which I believe is crucial for crafting targeted policies to meet this goal as effectively as possible. For instance, the report emphasized the importance of improving policy coordination and heeding the market's voice, which I understand are both positive factors.
出台实施政策要能早则早、宁早勿晚，与各种不确定性抢时间，看准了就一次性给足，提高政策实效。
Policies should be introduced and implemented as soon as possible -- it is better to act early than late, as this will buy valuable time for addressing any uncertainties that may arise. Once we are certain of a policy, we should decisively act with ample force to produce more effective outcomes.
注重倾听市场声音，协同推进政策实施和预期引导，塑造积极的社会预期。
We will heed the market’s voice, make concerted efforts to facilitate policy implementation and guide expectations, and strive to shape positive public expectations.
Deficit ratio
A higher deficit-to-GDP ratio at around 4 percent, an increase of one percentage point over last year. The change echoes an article by Finance Minister Lan Fo'an published on Feb. 21 in People's Daily, in which he explained the rationale behind increasing China's deficit-to-GDP ratio.
提高财政赤字率，加大支出强度、加快支出进度。赤字率是宏观政策的一个重要风向标。根据宏观经济周期性变化，通过提高赤字率，加强逆周期调节，是世界各国通行做法。
We need to set a higher deficit-to-GDP ratio, increase the intensity of spending, and accelerate the process. The fiscal deficit ratio is a key indicator of macroeconomic policy. In response to cyclical changes in the economy, it is a common global practice to raise the deficit ratio in order to strengthen counter-cyclical measures.
今年将统筹考虑宏观调控需要，提高财政赤字率，进一步增加财政总支出规模，为经济发展注入更多动力。同时，财政政策主动靠前发力，加快各项资金下达拨付，尽快形成实际支出。
This year, the Chinese government plans to take a comprehensive approach to macroeconomic regulation by increasing the fiscal deficit ratio and boosting overall fiscal spending to stimulate economic growth. At the same time, fiscal policy will take a more proactive role, expediting fund allocations and disbursements to translate them into actual spending as soon as possible.
New quality productive forces
It comes as no surprise that developing new quality productive forces was once again listed as one of the key tasks in this year's government work report.
Definition of "new quality productive forces" given by Xi — Qiushi
概括地说，新质生产力是创新起主导作用，摆脱传统经济增长方式、生产力发展路径，具有高科技、高效能、高质量特征，符合新发展理念的先进生产力质态。
With innovation playing the leading role, new quality productive forces mean advanced productivity that is freed from traditional economic growth mode and productivity development paths, features high-tech, high efficiency and high quality, and comes in line with the new development philosophy.
Many China watchers believe that the concept is closely tied to China's efforts to achieve technological self-reliance and break through the containment and suppression imposed by certain countries. At a press conference on Monday, Liu Jieyi, spokesperson for the third session of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC), also shared some progress in developing new quality productive forces in China.
Liu said that among the 189 industry leaders in the Global Lighthouse Network, an initiative co-founded by the World Economic Forum and McKinsey, China boasts 79, nearly half of which are in traditional industries such as steel and food.
He also explained how the CPPCC has contributed to the development of new quality productive forces.
"Among the proposals of the CPPCC National Committee, promoting the development of new quality productive forces is a key focus. We organized the CPPCC National Committee members and renowned scholars in social sciences across the country to conduct theoretical research on this topic and produced research reports to enhance implementation with concrete measures," he said.
Members of the CPPCC National Committee include those who have work experience on an international scale. Their exposure to global environments renders them particularly attuned to the forefront of technological advancements worldwide, and it is natural for them to contribute to the development of new quality productive forces.
“We closely tracked international cutting-edge breakthroughs and conducted in-depth research at research institutes and enterprises on topics such as the commercialization of scientific and technological achievements, the construction of regional innovation centers, and the development of innovative pharmaceuticals,” said Liu.
Artificial Intelligence (AI)
As I previously predicted, AI is one of the hot topics at this year's "two sessions," likely further fueled by DeepSeek's recent sensational rise. The government work report also includes development plans related to AI, as part of the efforts of developing new quality productive forces.
持续推进“人工智能＋”行动，将数字技术与制造优势、市场优势更好结合起来，支持大模型广泛应用，大力发展智能网联新能源汽车、人工智能手机和电脑、智能机器人等新一代智能终端以及智能制造装备。
Under the AI Plus initiative, we will work to effectively combine digital technologies with China’s manufacturing and market strengths. We will support the extensive application of large-scale AI models and vigorously develop new-generation intelligent terminals and smart manufacturing equipment, including intelligent connected new-energy vehicles, AI-enabled phones and computers, and intelligent robots.
According to the report, the Chinese government plans to drive the development of various industries through AI large models, rather than just focusing on the models themselves.
I interviewed Prof. Xu Hao from the College of Computer Science and Technology at Jilin University about the AI large models in China. He said that AI large models have become as essential as electricity and the internet -- critical infrastructure that will spur the rapid development of technologies like smart vehicles, drones, and humanoid robots. AI is at the core of these innovations, including the low-altitude economy that has received quite a lot of attention from the government recently.
Regarding concerns over the potential rat race as more companies flock into the field, Xu believed that AI presents numerous scientific and technical challenges that no single company can now tackle alone.
"Competition at the current stage is about various players addressing shared problems, each with their own approach and unique positioning in the market," Xu explained. "In my view, this will foster a much healthier ecosystem than if only one company were involved."
Foreign policy
We will stay committed to an independent foreign policy of peace and to the path of peaceful development. We will remain firm in pursuing a mutually beneficial strategy of opening up, oppose hegemonism and power politics, oppose unilateralism and protectionism in all forms, and uphold international fairness and justice.
The government work report briefly touches on foreign affairs. Those interested in more comprehensive details of China's foreign policy should attend the dedicated press conference scheduled for March 7, which I will also be attending as a journalist.
In my previous newsletter on the "two sessions," I said this year in the press conference, don't be surprised if a Chinese diplomat invokes Chinese poems or proverbs to articulate China’s diplomatic philosophy.
Just this Tuesday, Chinese Ambassador to the United States Xie Feng quoted a poem of Chairman Mao Zedong to share his views on U.S. tariff in an interview with 玉渊谭天 Yuyuan Tantian, a social media account affiliated with China Media Group, at the Great Hall of the People during the “two sessions.”
Below is the translation provided by DeepSeek:
”暮色苍茫看劲松，乱云飞渡仍从容。“
"In the thickening dusk, the rugged pine holds fast; chaotic clouds race by -- unshaken, calm, steadfast."
"On the one hand, we must soberly confront the grave challenges confronting China-U.S. relations," Xie said. "On the other hand, we should remain confident in our country's development and the great rejuvenation of the Chinese nation. History teaches us this truth: whether tariff wars or trade wars, what begins as attempts to bleed others ultimately ends in self-inflicted wounds."
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