China is on track to meet its 2025 growth target, with the economy expected to expand by 5 percent annually, given its continued recovery, a raft of stimulus measures, blossoming emerging industries, and gradual rebound in demand, an expert on economic policy said.
"China is accelerating its shift toward a technology — and innovation-driven growth model," said Sun Xuegong, director-general of the department of policy study and consultation at the Chinese Academy of Macroeconomic Research, a think tank under the National Development and Reform Commission, the country's top economic regulator.
"Emerging sectors such as high-tech manufacturing, electric vehicles, new energy, and the biotech industry are playing an increasingly significant role in driving growth, which is a favorable factor," he said in an exclusive interview with China Daily recently. "On the demand side, retail sales are also on the rise, which will likely grow at a faster pace this year compared to last year, further strengthening the growth momentum."
He said China can achieve 5 percent year-on-year economic growth this year despite challenges.
"China's economic fundamentals are sound, with a strong manufacturing sector and great market potential," he noted. As the broader economy is still facing headwinds at home and from external factors, he said more efforts should be made to further boost domestic demand and spur consumption.
In its 2025 Government Work Report, China announced that it would vigorously boost consumption and investment, and stimulate domestic demand across the board. It also said it will double ultra long-term special treasury bonds earmarked for its trade-in program to 300 billion yuan ($41.38 billion) this year.
Sun highlighted the need for a comprehensive policy mix to boost consumption, including short-term moves like subsidizing the purchase of consumption goods as well as long-term spending on strengthening the social safety network.
With a series of existing policies taking effect gradually and more supportive measures in the pipeline, Sun said he expects to see a pickup in consumption. "I believe we have great growth potential."
On the investment front, he said China's investments are growing at a pace in line with historical trends, leading him to believe that it will remain stable in 2025. "We also have a range of policies to support investment, including ultra long-term special treasury bonds and local government special bonds, which help drive investment growth," he added.
The work report said China will also issue 1.3 trillion yuan in ultra-long-term special treasury bonds this year, up from 1 trillion yuan for 2024, and issue special local government bonds worth 4.4 trillion yuan, compared with 3.9 trillion yuan last year.
In 2025, China will also strive to develop new quality productive forces aligned to local conditions and accelerate the development of a modernized industrial system, said the report.
Looking ahead, Sun said China should continue to increase spending on research and development, particularly in basic research. More efforts should be made to reform the science and technology system to give scientists more freedom to explore new ideas. Additionally, the education system should be reformed to encourage students to develop innovative thinking, rather than just focusing on test scores. "This requires a comprehensive and systematic approach," he noted.
Sun also emphasized that China's growth is not only driven by emerging industries but also by the upgrading of traditional sectors. "This year, we are launching the 'AI Plus' initiative, which will integrate AI into traditional industries. By doing so, we can enhance efficiency and productivity, making those sectors a crucial driver of future growth," he said.
Lin Shen, an associate research fellow at the Chinese Academy of Social Sciences' Institute of World Economics and Politics, noted the structural transformation of the economy, where new growth drivers are replacing traditional ones. "Our new quality productive forces, supported by AI, have integrated well with manufacturing and the real economy. The next step will be significant advancements in application scenarios," he said.
ouyangshijia@chinadaily.com.cn
