China has introduced further fiscal stimulus to help meet its 2025 growth target of 5%, as Premier Li Qiang highlighted the global shifts “unseen in a century” that could affect the economy. He warned of escalating challenges, including a complicated trade war with the United States, which is threatening China’s industrial sector. In response to these pressures, China is focusing on boosting domestic consumption to counter sluggish demand, particularly in the household sector, and reduce reliance on exports and investments.

Li’s speech placed more emphasis on consumption than past years, signaling a shift in policy focus. He announced plans to issue 1.3 trillion yuan in long-term treasury bonds and allowed local governments to issue 4.4 trillion yuan in special debt. Additionally, the government will invest 300 billion yuan into consumer subsidies, especially for electric vehicles and home appliances.

Despite these efforts, analysts suggest that the broader impact of the trade war still requires more time for evaluation. Li also acknowledged China’s demographic challenges, pledging initiatives like childcare and elderly care subsidies to address the country’s aging population. The stimulus measures aim to support internal demand amidst external economic pressures.