China’s economy is projected to grow by 5% in 2025, according to President Xi Jinping, aligning with official growth targets and dismissing concerns about potential challenges posed by the incoming US administration under Donald Trump.
In his annual address, Xi reassured citizens that the world’s second-largest economy remains “stable and progressing” despite recent efforts to stave off a recession in 2024. Speaking through the official Xinhua news agency, he noted that key economic risks had been addressed effectively, while employment and prices remained steady.
His remarks followed a December Communist Party politburo meeting, which signaled a stronger commitment to economic stimulus than seen in the past decade. Measures included more aggressive subsidies and reduced borrowing costs. Xi acknowledged new challenges, such as external uncertainties and the transition to new growth drivers, but expressed confidence in overcoming them through hard work.
Meanwhile, tensions with the US are escalating as Trump prepares to impose steep tariffs on Chinese imports, targeting subsidies for industrial products. In response, China is expected to introduce restrictions on US businesses, including Tesla, whose CEO Elon Musk has been an advisor to Trump.
On the Taiwan issue, Xi adopted a firm stance, reiterating that “no one can stop” the unification of Taiwan with China and leaving the use of force on the table. Taiwan, a significant player in global chip exports, remains a contentious issue between Beijing and Washington, with the US serving as Taiwan’s strategic ally and primary arms supplier. Xi emphasized the shared heritage of people across the Taiwan Strait, asserting that reunification is a historical inevitability.
Although China’s policymakers have yet to announce an official growth target for 2025, 5% is anticipated during a meeting in January. Stimulus measures introduced in late 2024 likely kept growth above 4.8% last year, though Bloomberg economists estimate a slower 4.5% growth for 2025, a notable drop from the 6% pre-pandemic average. Skepticism persists about the accuracy of China’s economic data, particularly during the pandemic when severe lockdowns reportedly dampened economic activity more than official figures suggested.
In 2024, modest stock market gains followed years of declines, as policymakers aim for sustained growth to bolster private investment. Stimulus efforts included significant public sector pay raises—the first in several years—intended to boost consumer spending. Reports indicate basic salaries for many civil servants increased by at least 500 yuan ($68.51) monthly, retroactive to July.
Amid ongoing challenges, China’s central bank is expected to ease borrowing restrictions to revive the housing market, where numerous property firms have collapsed. Xi also reaffirmed strong ties with Russia, emphasizing a “hand-in-hand” partnership following a strategic agreement in May. Reports suggest Xi plans to visit Russia in 2025, underscoring the deepening bilateral relationship on mutual concerns like Taiwan, Ukraine, and countering US influence.
