The third session of the 14th National People's Congress of China opened in Beijing on Wednesday (March 5). Premier Li Qiang delivered a government work report, maintaining China's expected economic growth target for 2025 at around 5%, the same as last year. However, analysts generally believe that it is difficult to achieve this goal against the backdrop of China's weak domestic economy and the increasing pressure of US tariffs on Chinese goods.

Li Qiang: The economic situation is "complex and severe", emphasizing "seeking progress while maintaining stability"

TEXT: In the government work report, Li Qiang acknowledged that China's economy faced "a complex and severe situation with increasing external pressure and internal difficulties" in the past year, but under the leadership of the CPC Central Committee with Xi Jinping as the core, China's economy was "generally stable, with steady progress", and the main goals and tasks of social and economic development for the whole year were successfully completed.

The report pointed out that China's gross domestic product (GDP) grew by 5% last year to 13.49 trillion yuan, ranking among the top major economies in the world, and its contribution to global economic growth remained at around 30%.

Li Qiang pointed out that the main economic goals of the Chinese government this year include: maintaining a GDP growth of around 5%, controlling the urban surveyed unemployment rate at around 5.5%, and creating more than 12 million new urban jobs; the consumer price index will increase by around 2%, and "residents' income growth will be synchronized with economic growth, and the balance of international payments will remain basically balanced."

The report further pointed out that the external environment China faces today is becoming more complex and severe, which may have a greater impact on areas such as trade and technology. This is mainly due to the insufficient momentum of world economic growth, "intensified unilateralism and protectionism, obstructed multilateral trading system, and increased tariff barriers." There are still many geopolitical tensions, which also exacerbate international market risks.

An article published by Hong Kong media "Hong Kong 01" on Wednesday analyzed that although the report did not directly name anyone, it was obviously alluding to the return of former US President Donald Trump to politics, which brought more uncertainty to the global situation, especially US-China relations.

Domestically, the Chinese economy is also facing "an unstable foundation for recovery and insufficient effective demand", especially sluggish consumption, production and operation difficulties of some enterprises, and pressure on people to increase employment and income; but the report also emphasizes that China has an extremely large market and significant institutional advantages, and "the basic trend of long-term economic improvement remains unchanged."

Scholars: It is difficult to achieve the economic growth target of 5% under the impact of tariffs

Lynn Song, chief economist for Greater China at ING, said in an email to VOA that external demand was the key to driving China's economic growth last year, not only promoting exports but also driving manufacturing activities.

But she warned that this year's U.S.-China tariff war could lead to weaker external demand, while the low public sentiment mentioned by Li Qiang in the report would also affect domestic demand, making it more challenging to achieve the 5% growth target this year.

Tsai Ming-fang, a professor at the Department of Industrial Economics and Economics at Tamkang University in Taipei, believes that 5% economic growth is just a verbal declaration and cannot be achieved in reality.

He said that China is currently facing a difficult international situation, and the United States' continued imposition of a 10% tariff on China will inevitably impact China's exports, and its gross domestic product (GDP) will also be affected.

He gave another example, saying that last year's National People's Congress and the Chinese People's Political Consultative Conference also set the economic growth target at 5%, and the consumer price index (CPI) target at 3%. However, China's CPI growth for the whole year last year was only 0.2%. When the actual demand of the entire country was only the originally assumed 6.7%, there was no explanation on how to achieve 5% economic growth.

Tsai Ming-fang told VOA: "With the deflationary situation (in China) last year, (economic growth) could not possibly reach 5%. Assuming your estimate last year was reasonable, didn't you reduce the consumer price index from 3% to only 2% this year? The related figures cannot be combined, and consumption cannot reach that high. So why can your economic growth rate remain unchanged and reach 5%?"

The government policy focus shifts to "expanding domestic demand"

In the task ranking of Li Qiang's government work report, "vigorously boosting consumption and improving investment efficiency" ranked first, highlighting that domestic demand has become the government's main focus.

Song Lin, chief economist of ING Greater China, pointed out that last year's similar goal of "expanding domestic demand" was only ranked third, which shows the shift in the government's work tasks. Expanding domestic demand has become a top priority. The "implementation and optimization of the vacation system" mentioned in the report will also help the Chinese government achieve the goal of expanding domestic demand.

He said that currently China's public holidays have several long periods, while individual vacation days are limited. This leads to traffic congestion, rising prices and uneven consumption during holidays. Although there are no specific details, reforming the vacation structure will benefit the entire tourism and leisure industry.

As for the "development of new quality productivity" which was ranked first last year, it has moved back one place. Song Lin believes that this field will still be a key project. In particular, the success of DeepSeek has allowed the market to see the prospects of China's artificial intelligence industry. It is foreseeable that China will continue to invest a lot of resources in artificial intelligence.

Song Lin further pointed out that China's reaffirmation of its growth target of about 5% shows increased economic confidence and indicates that China will introduce more powerful policies to support domestic demand.

For example, Li Qiang proposed higher fiscal deficit and bond issuance targets, so we can expect to see Beijing introduce stronger fiscal policy support this year. The speed and effectiveness of policy introduction in the coming months will be crucial to whether the annual economic growth target can be achieved.

China's military spending grew by 7.2%, continuing to outpace economic growth

As much as economic growth has attracted attention, the growth of military expenditure has also received attention. The draft central and local budget reports submitted by the Ministry of Finance of China show that China's defense expenditure in 2025 will be RMB 1.7846 trillion (about US$245.6 billion), a year-on-year increase of 7.2%, the same as the previous two years, both of which are the highest in recent years.

Weibo users generally support this, and many believe that China must strengthen its military to cope with global uncertainties. Beijing blogger "V Flashing" with 1.97 million followers wrote that the world is not safe and conflicts are intensifying, and "military hard power is the premise of everything."

Another Shanghai blogger named "Chen Rushishuo" also wrote that US President Trump is clamoring to cut defense spending in half together with China and Russia. "This is an obvious pit, China and Russia will never jump into it"; Shanghai netizen "outman-119" responded by saying: "In fact, it would be better to increase it a little bit."

Su Ziyun, director of the Institute of Defense Strategy and Resources at the Taipei-based Institute for National Defense and Security, said that China's military expenditure growth mainly comes from investment in naval and air combat capabilities, and also symbolizes its efforts to move from a land power to a maritime power. This can be seen from the exercises held in the waters between Australia and New Zealand, between China and Vietnam, and in the Taiwan Strait on the eve of the two sessions.

Su Ziyun believes that other key military investments include those related to what Xi Jinping calls "new quality combat capability", such as unmanned vehicles, military artificial intelligence, and nuclear weapons that the United States is concerned about.

However, he also said that the CCP's military spending growth has been higher than its economic growth targets year after year, highlighting its warmongering nature.

Su Ziyun said: "The growth rate of (China's) military expenditure is higher than the growth rate of the economy, which means that the Chinese government still gives high priority to military enterprises and military development, regardless of other industries, or even (regardless of) the shrinking domestic economy."

Netizens mock pension increase of 20 yuan as "a drop in the bucket"

Compared with the substantial increase in military spending, the government report mentioned that "the minimum standard for basic pension for urban and rural residents will be increased by another 20 yuan", which triggered widespread ridicule among Weibo netizens.

Beijing netizen "joney__chen" wrote sarcastically: "It's only 20 yuan a year, and the salary increases by more than 1 yuan a month." "The Itchy Palm of My Hand" in Jilin Province questioned: "How many kilograms of rice can you buy with 20 yuan? Can you buy a loaf of bread? Now a loaf of bread in a bakery costs dozens of dollars. The elderly only deserve to have two bites of food to live."

Taipei scholar Tsai Ming-fang pointed out that increasing the pension by 20 yuan is just a drop in the bucket and will only have limited impact on the quality of life of the general public. On the contrary, if the 20 yuan given to each citizen is concentrated and used to build infrastructure in areas with more serious aging problems, it may be of greater help to China's elderly people.