Some thoughts on China’s Two Sessions 2025

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China’s annual feast of democracy is on its way. The sessions of the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC) took off on March 4 and 5 respectively, the latter being of more relevance for China’s policy agenda. At the NPC, Premier Li Qiang presented the Report on the Work of Government, and the government also submitted the budget report (the “report on the execution of the central and local budgets for 2024 and on the draft central and local budgets for 2025), and the planning report ( the “report on the implementation of the 2024 plan for national economic and social development and on the 2025 draft plan for national economic and social development). Premier Li Qiang’s speech took off an hour before on the other side of the Pacific Mr. Trump made his (quasi) State of the Union address to the US congress, and let’s just say that the former was a bit more substantive and organized than the latter, and a lot shorter!China’s government has set out an ambitious GDP growth target of “about 5 percent.” This is the same as last year’s and was anticipated in provincial growth target announcements earlier this year, which in turn relied on the guidance from the Central Economic Work Conference of last December. The government’s fiscal targets of about 4 percent of GDP in on-budget deficit adds some 1 percent of GDP in stimulus, and off-budget another 0.2-03 percent of GDP further supports GDP. The government’s 2 percent target for consumer price increases (rather than the traditional 3 percent) seems to recognize the chal…