Having only reached last year's economic growth target of roughly 5% with a late stimulus push, Premier Li Qiang is expected to lay out a similarly lofty, but even harder to reach goal for 2025 in front of the National People's Congress (NPC).
Trump has also dangled tariffs at a long list of countries, including some which would consider themselves staunch U.S. allies, threatening a decades-old global trade order that Beijing has built its economic model around.
Li is expected to announce a higher budget deficit of 4% of gross domestic product and record debt issuance. Some of these resources will help fund a recently-expanded consumer subsidy scheme for electric vehicles, appliances and other goods. (For a list of key targets expected, click here.
“With deflationary pressures becoming entrenched against the background of an unfavourable external environment ... boosting domestic household consumption demand is a key priority,“ said Eswar Prasad, trade policy professor at Cornell University and a former China director at the International Monetary Fund.
China's 5% growth rate last year was among the world's fastest, but it was hardly felt at street level.
Chinese producers, facing weak demand at home and harsher conditions in the United States, where they sell more than $400 billion worth of goods annually, have no choice but to rush to alternative export markets all at the same time.
Since Trump took office in January, his administration has so far added an extra 20 percentage points on existing import tariffs for Chinese goods, with the latest 10-point increment having kicked in on Tuesday.
China on Tuesday swiftly retaliated against the fresh U.S. tariffs, announcing 10%-15% hikes to import levies covering a range of American agricultural and food products, and placing twenty-five U.S. firms under export and investment restrictions.
Electric vehicle makers such as BYD and AI platform Deepseek have taken to the world stage with plenty of pizzazz.
“The tangible impact of this innovation drive on growth, specifically through increased productivity, is not yet visible,“ she said.
“While industrial policy and technological advancement are important, China must address its fundamental imbalances.” (Additional reporting by David Kirton in Shenzhen; Writing by Marius Zaharia; Editing by Kim Coghill)
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