China is maintaining its GDP growth target for 2025 at "around 5 percent," according to the Government Work Report released on Wednesday. At the same time, Beijing has introduced its most significant measures in over a decade to stimulate domestic demand amid a complex and challenging external environment. The growth target, in line with market expectations, underscores China’s determination to sustain economic momentum despite renewed trade tensions with the United States, which imposed additional tariffs on Chinese goods this week. Premier Li Qiang, delivering the report at the opening of the third session of the 14th National People's Congress in Beijing, emphasized that the target aligns with China’s long-term development goals and reflects the government’s resolve to navigate economic headwinds. While Li did not explicitly reference tariff disputes, he acknowledged external challenges "unseen in a century [and] unfolding across the world at a faster pace."
The U.S. has imposed additional 20 percent tariffs on Chinese exports since President Donald Trump took office in January and is now considering further restrictions. A draft executive order, dated February 27 and reviewed by Reuters, proposes docking fees for vessels entering U.S. ports if they belong to fleets that include Chinese-built or Chinese-flagged ships. The U.S. is also urging allies to adopt similar measures or risk retaliatory action. In response, China has targeted U.S. agricultural and energy exports with countermeasures, including export controls and security restrictions on American companies.
Amid these developments, pressure is mounting on Chinese policymakers to introduce stronger stimulus measures to support domestic consumption and the struggling housing sector while reducing reliance on exports and investment. Li’s report referenced "consumption" 31 times, up from 21 last year, and "technology" 28 times, slightly more than the 26 mentions in 2024, according to Guotai Junan analysts. While China has pursued a "proactive" fiscal policy for 16 consecutive years, this year’s report signaled a shift toward a "more proactive fiscal policy."
The annual fiscal deficit-to-GDP ratio is set at around 4 percent, up from 3 percent in 2024, marking the highest level since records began in 2010. China will issue 1.3 trillion yuan ($179 billion) in ultralong-term special treasury bonds this year, up from 1 trillion yuan in 2024, and allocate 4.4 trillion yuan in special local government bonds, compared to 3.9 trillion yuan last year. Additionally, 500 billion yuan of special treasury bonds will be used to support capital replenishment for large state-owned commercial banks. Beyond the 300 billion yuan earmarked for an expanded consumer subsidy program covering electric vehicles, appliances, and other goods, Li’s report offered limited direct support for households. Although Beijing has long pledged to transition toward a more consumer-driven growth model, progress has been slow, and investors remain skeptical about any fundamental shift in policy.
Expectations that China’s annual parliamentary meeting would introduce substantial stimulus to boost commodities have been largely unmet, with Beijing instead signaling a continuation of last year’s moderate policy stance. The country’s imports of major commodities started 2025 on a weak note, continuing the recent trend of softening demand amid concerns over economic growth. Customs data released Friday showed that imports of crude oil, natural gas, iron ore, and copper all declined in the first two months of the year compared with the same period in 2024. Iron ore imports fell 8.4 percent year-on-year to 191.36 million tonnes, reflecting weaker steel demand and weather-related disruptions in Australia. Coal imports rose 2.1 percent year-on-year to a record 76.12 million tonnes for the January-February period, driven by favorable arbitrage opportunities. However, the figure was significantly lower than levels recorded in November and December, indicating a potential slowdown in demand. Meanwhile, soybean imports reached 13.6 million tonnes in the first two months of 2025, up from 13.03 million tonnes in the same period last year. Importers had increased purchases in late 2024 over concerns that renewed U.S.-China tensions could disrupt agricultural trade, though slower customs clearance at Chinese ports delayed arrivals.
Despite these structural shifts, the seasonal upswing in spot market activity is approaching, with momentum expected to build in the coming weeks. For now, the market remains optimistic about seasonal strength. However, higher tariffs, retaliatory measures, and the sluggish performance of China’s economy provide little assurance of sustained growth in overall trading activity in the long run.
Data source: Doric