Statement on the 2025 Government Work Report Go back »

2025-03-05 | All chapters

Background

At the 2025 meeting of the National People’s Congress, similar to last year, China set a target for economic growth in 2025 at around 5 per cent and pledged to further deepen comprehensive reform and expand high-standard opening up.

This year’s Government Work Report includes a directive on encouraging foreign investment. Specifically, it mentions opening up sectors related to the internet and culture, and expanding trials to open other sectors including telecommunications, medical services and education. China’s pledge to ensure national treatment for foreign-invested enterprises was also reiterated, including when it comes to access to production factors, license applications, standards setting and government procurement. In addition, the report vows that China will provide better services for foreign professionals.

The report also acknowledges headwinds facing China’s economic recovery, and highlights areas in which efforts should be made to support growth, including boosting domestic consumption, addressing local government debt and restoring stability to the real estate market.

Statement

The announced intention to deal with structural challenges, such as reducing government debt and bringing the real estate market back to health, are positive signs. The most important task, however, will be effectively addressing low domestic demand and producer price deflation in order for China to stabilise its economy and transition towards a more sustainable growth model. It is therefore positive that the report includes pledges to this end. European companies are now looking forward to detailed guidelines on how this will be achieved.

While the report also mentions the task of stabilising foreign investment, the related points listed are largely a reiteration of previous policy announcements. At the same time, the document places a strong emphasis on exports, noting that their importance as a growth driver has increased over the past year. This could become an increased source of tension, as China’s growth in exports has contributed to the trade imbalances that is has with many of its key partners, which has led to many of them taking actions in a bid to bring about a more balanced trade relationship. A strong uptick in imports from these partners could therefore help to diffuse this situation.

The European Chamber will continue to work with Chinese stakeholders and offer constructive recommendations on where concrete steps are needed to turn the relevant pledges into the kind of actions that can improve business confidence among foreign companies.

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