China’s Two Sessions – Market Expectations and Policy Signals
Article published on March 4th, 2025 5:45AM UK Time
China’s annual Two Sessions meetings, a key political and economic event, are set to unfold this week, with the Chinese People’s Political Consultative Conference (CPPCC) commencing on March 4th and the National People’s Congress (NPC) following on March 5th. These high-profile gatherings will outline China’s policy priorities for 2025, shaping expectations for growth, inflation, and potential stimulus measures. Investors and policymakers alike will be closely scrutinizing the announcements, particularly as China navigates external economic pressures, including fresh tariff threats from the US.
Economic Growth Target in Focus
Premier Li Qiang is expected to deliver China’s key economic targets at the start of the NPC meeting. The headline figure—GDP growth for 2025—is widely anticipated to be set at “about 5%”, unchanged from 2024.Inflation expectations could be revised downward. A report from Securities Times suggests China’s CPI target will be lowered to 2% from 3%, aligning with subdued price pressures.
Consumption & Stimulus: A Key Balancing Act
Domestic consumption is expected to be a central theme. Chinese President Xi Jinping has emphasized the need to accelerate efforts to boost consumer spending, and UBS expects this to be a top priority at the NPC meeting. While Beijing’s rhetoric suggests a pro-growth stance, analysts caution against expectations of aggressive stimulus measures.
The timing of the Two Sessions coincides with renewed US-China trade tensions, adding an additional layer of uncertainty. Former President Trump has threatened an extra 10% tariff on Chinese goods, effective March 4th, on top of the 10% already imposed on February 4th.
Trade Risks
Domestic consumption is expected to be a central theme. Chinese President Xi Jinping has emphasized the need to accelerate efforts to boost consumer spending, and UBS expects this to be a top priority at the NPC meeting. While Beijing’s rhetoric suggests a pro-growth stance, analysts caution against expectations of aggressive stimulus measures.
The timing of the Two Sessions coincides with renewed US-China trade tensions, adding an additional layer of uncertainty. Former President Trump has threatened an extra 10% tariff on Chinese goods, effective March 4th, on top of the 10% already imposed on February 4th.