BEIJING, China: China has set an economic growth target of "around five percent" for 2025, signaling efforts to stabilize the economy amid mounting challenges, including a potential trade war with the United States.

The target, announced at the annual National People's Congress, remains unchanged from the past two years but could be harder to achieve due to new U.S. tariffs and sluggish domestic consumption.

Premier Li Qiang presented the government's report, acknowledging both international and domestic pressures.

"An increasingly complex and severe external environment may exert a greater impact on China in areas such as trade, science, and technology," the report stated. "Unilateralism and protectionism are on the rise."

The International Monetary Fund (IMF) projects China's economy will grow 4.6 percent this year, down from five percent in 2024. The government emphasized boosting domestic demand, calling it "the main engine and anchor of economic growth." However, officials admitted that "achieving this year's targets will not be easy, and we must make arduous efforts to meet them."

New U.S. tariffs, set at 20 percent on Chinese products, threaten exports to one of China's biggest markets. This, combined with a prolonged real estate downturn and weak private investment, underscores the need to stimulate consumer spending.

The government announced an increase in its budget deficit from three percent to four percent of GDP as part of a "more proactive fiscal policy." It also plans to issue 1.3 trillion yuan (US$180 billion) in ultra-long-term bonds, with 300 billion yuan allocated to a program offering rebates for trading in old vehicles and appliances for new ones.

Despite these measures, economists remain skeptical about whether they will be enough. Julian Evans-Pritchard of Capital Economics noted, "We remain skeptical that it will be sufficient to prevent growth from slowing this year, especially given the headwinds on the external front and the lack of a more pronounced shift in government spending toward support for consumption."

President Xi Jinping continues to push for China to transition away from its reliance on real estate and focus on technological innovation. Xi emphasized that "technological innovation and industrial innovation are the basic paths to developing new quality productivity."

The government report also highlighted artificial intelligence as a priority, pledging support for AI applications, smart manufacturing, connected vehicles, and intelligent robots. While China is attempting to shift its economy toward high-tech industries, immediate concerns over growth and trade remain pressing challenges.