BGA China Team Advisor Eric Wang wrote an update to clients on the key economic and foreign policy takeaways from China’s “two sessions.”

Context

  • China concluded the 2025 “two sessions” on March 11 with Premier Li Qiang’s delivery of the government work report outlining major policies and targets for the year. There were no major surprises in the government’s narratives or policy directions, which were consistent with the 2024 Central Economic Work Conference.

  • Sustainable economic growth remains a central focus, with the high-level government report prioritizing “expanding domestic demand.” This reflects general expectations for more proactive and comprehensive economic policies to address post-COVID-19 challenges and recovery.

Significance

  • The economic growth target for 2025 is set to remain around 5 percent, mirroring the previous year’s goal, with consumer price inflation targeted at approximately 2 percent. To achieve this goal, the government is crafting policy to support consumer demand. The service sector will be a key focus and is expected to drive consumption growth. Externally, China will further open its services sector to foreign investors, particularly in internet-related industries, culture, telecommunications, medical services and education. Internally, policies will aim to unlock the potential of consumption in the culture, tourism and sports sectors.
  • The government work report mentions “ensuring stability in the real estate and stock markets” for the first time, highlighting their crucial role in rebuilding consumer confidence. This indicates that the government will take all necessary measures to support property and equity prices. This includes a CNY 500 billion ($68.9 billion) increase in local government special-purpose bonds.

Implications

  • The agenda underscores a commitment to supporting “new productive forces,” with technological innovation playing a crucial role in the coming years. The report also highlights increased support for the private sector, including encouraging foreign investment through deregulation of strategic sectors, emphasizing a renewed focus on private sector growth.
  • Some economists suggest that the stimulus may not be sufficient given ongoing domestic consumption challenges. However, it aligns with President Xi Jinping’s long-term policy agenda of sustaining China’s development. This approach also provides the government with ample policy space to respond to the uncertain global economic situation.

We will continue to keep you updated on developments in China as they occur. If you have any questions or comments, please contact BGA China Advisor Eric Wang at ewang@bowergroupasia.com.

Best regards,

BGA China Team

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Advisor

Eric has over two decades’ experience in government affairs and public relations and currently serves as firm partner and managing director of Yuan Associates. He has worked with more than 80 clients in manufacturing, agriculture and food, consumer goods and service industries. Eric joined Yuan Associates in 2005 and become a partner and managing director in 2011. As managing director, he is responsible for comprehensive government affairs service for and management of clients. As a partner his responsibilities include overseeing the firm’s daily overall operations. Prior to joining Yuan Associates, Eric worked as an account manager for Euan Barty Associates ... Read More