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Chinese government advisers are recommending a 5% growth target for 2025 despite ongoing trade tensions, particularly with the U.S. Experts argue that achieving this target would require stronger fiscal stimulus, especially to counter the impact of expected U.S. tariffs on exports. The advisers also urge increased domestic demand and reforms to support economic stability. Though Beijing's official target won't be announced until March, the proposed goal suggests China's commitment to maintaining economic expansion despite the challenges posed by tariff threats and global uncertainties. The government's strategy includes both fiscal measures and consumer-focused policies to sustain growth.

Key Highlights

# Advisers recommend a 5% growth target for 2025.

# U.S. tariffs may lower growth by up to 1%.

# Beijing plans stronger fiscal stimulus to boost domestic demand.

# China’s budget deficit could rise to 3.5-4% of GDP.

# Consumer-focused policies and structural reforms are advised.

Chinese government advisers are suggesting a growth target of around 5% for 2025, even as the country faces challenges from U.S. tariffs and global economic uncertainty. The proposed target comes in response to ongoing trade tensions, particularly with the U.S., where new tariffs could negatively affect China’s exports. Despite predictions of a slowdown, advisers argue that a robust fiscal stimulus package and increased domestic consumption can offset some of these impacts. Experts also emphasize the need for structural reforms to address imbalances in the economy.

The government's fiscal policy plans include a significant increase in the budget deficit to fund infrastructure projects and consumer support measures. Special treasury bonds may be issued, and a focus on low-income support, along with subsidies for consumer goods, could help stimulate demand. However, advisers warn that relying solely on stimulus without addressing deeper economic structural issues could lead to long-term instability.

On the trade front, China's reliance on exports remains a concern, with the industrial sector facing additional pressures due to the tariffs. However, the government is confident that domestic demand can mitigate some of these losses. The advisers are advocating for balanced policies that focus on both immediate economic recovery and long-term sustainability.

Finally

China’s advisers are optimistic about achieving 5% growth in 2025, but achieving this goal will require a delicate balance of fiscal stimulus, reforms, and overcoming trade barriers.

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