People's Bank of China Confirms 'Around 5%' GDP Target for 2025 Despite Trade War Challenges
Economic Outlook Amid Trade Tensions
As the People's Bank of China reaffirms its GDP target at 'around 5%' for 2025, concerns loom over heightened tariffs under President Donald Trump's second term. The Chinese economy faces challenges as exports constitute about 20% of its GDP, and the anticipated trade shock may temporarily hinder growth. Zhang Ming, deputy director of the Chinese Academy of Social Sciences, states that while growth may initially slow, recovery is expected later in the year.
Policy Adjustments and Stimulus Measures
To counter the impending trade barriers, the Chinese government is likely to increase expansionary macroeconomic policies. Zhang predicts a fiscal deficit target rise to 4-5% in 2025, above the current target of 3%. This proactive stance may include issuing large-scale treasury bonds to support economic stability.
- Potential cuts in the reserve requirement ratio (RRR) by the People's Bank of China
- Interest rate adjustments until consumer price index (CPI) stabilizes
- Relaxation of real estate purchase restrictions in prime locations to support housing markets
As pressure mounts from external factors, these policies aim to safeguard China’s economic health moving forward amidst the challenges presented by the ongoing trade war.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.