How Bold Is China’s 2025 Economic Plan?

On March 5, China released its 2025 Government Work Report, proposing an ambitious economic target: achieving GDP growth of around 5%.

At first glance, the 5% figure might not seem particularly striking, however, for China, whose total economic around $18 trillion in 2024. The 5% increasing goal means to make $900 billion—nearly equivalent to the entire GDP of Saudi Arabia (around $1 trillion in 2024), a nation synonymous with wealth and opulence.

To grasp just how bold China’s 5% target is, one need only look at the projections from Western policymakers.

The World Bank estimates global GDP growth in 2025 will average just 2.7%. The U.S. Congressional Budget Office forecasts a growth rate of about 1.8% for America. The Organisation for Economic Co-operation and Development (OECD) predicts the U.K.’s growth this year at a mere 1.7%, while Germany’s Industrial Association anticipates a 0.1% contraction for the German economy in 2024—marking its third consecutive year of decline.

“There is a period of transition, because what we’re doing is very big,” Trump said on March 9 on the Fox News show “Sunday Morning Futures.”

Meanwhile, China is poised to sustain 5% growth for the third consecutive year, having met or exceeded this target since 2023 (5.2% in 2023, 5% in 2024). Clearly, while the U.S. and Europe are becoming drags on the global economy, China is emerging as the engine of wealth creation.

So, amid the World Bank’s prediction a global economic gloom in 2025, What underpins China’s resilience? Two pillars from the Work Report reveal the answer.

Pillar 1: High-Tech Manufacturing Surge

China’s high-tech manufacturing sector expanded by 8.9% over the past year. High-tech manufacturing encompasses industries such as electric vehicles (EVs), smartphones, aerospace, and computer hardware.

Growth in these sectors generates substantial trade surpluses. In the 1960s, the U.S. sustained GDP growth above 4% for years by leading the Third Industrial Revolution. Today, China is driving economic growth through a new technological revolution.

For instance, in 2024, China produced 13 million EVs, now account for 76% of the global market. Japanese media Nikkei reported that China’s trade surplus hit a historic high of $992.1 billion in 2024, up 21% from 2023, with automotive exports rising 16% as a key growth driver. Notably, while EVs have become a pillar of China’s industrial strategy, the country has refrained from using embargoes for unfair competition.

In 2024, BYD Marks 30th Anniversary with Roll-off of 10 Millionth NEV

According to China Automotive Daily, China exported 3.563 billion lithium battery units in 2024, a 7.3% year-on-year increase. Lithium batteries, the core component of EV power systems, determine critical metrics such as range, output, safety, and lifespan. The success of Chinese EVs stems largely from advanced battery technology, yet China has not restricted battery exports, unlike the US chip export controls.

In fact, Contemporary Amperex Technology Co.(CATL), China’s leading battery manufacturer, has built 2 battery plants in Germany and Hungary, and projecting 1 in Spain. In October 2024, Volkswagen announced plans to shut down at least three factories and lay off tens of thousands of workers. CATL’s investments have become vital for the EU workers.

Battery cell production is scheduled to start in 2025 at CATL’s newly built factory in Debrecen (eastern Hungary)

Pillar 2: Inclusive Growth

China’s per capita disposable income grew by 5.1% in real terms in 2024.

This figure, nearly matching GDP growth, indicates that the vast majority of Chinese citizens are sharing in the nation’s wealth accumulation. China is not only growing richer but also narrowing its wealth gap—ensuring that high-tech products meet genuine demand, thereby sustaining market vitality.

The beneficiaries of this “common prosperity” extend beyond Chinese companies. Take Tesla: despite a decline in global sales in 2024 and a drop in its Chinese market share from 7.8% in 2023 to 6%, Tesla’s sales in China hit a record 657,000 vehicles, generating $20.9 billion in revenue. In China, the absolute growth in market demand enables Tesla to offset its relative competitive decline.

At the 2024 Guangzhou Auto Show, Chinese celebrity Luo Yonghao was invited to participate in a price reduction promotion event involving Tesla

Beyond EVs, advancements in Chinese AI technologies, such as DeepSeek and Manus, have bolstered global investor confidence. Jeff Weniger, WisdomTree’s Head of Equity Strategy, coined the term “Terrific Ten” to describe China’s 10 high-tech leaders, mirroring the U.S.’s “Magnificent Seven.” This concept has become an investment benchmark, as the Magnificent Seven once symbolized guaranteed returns in U.S. markets.

However, Chinese strategist, Professor Wang Xiangsui, points out that China’s high-tech industries fundamentally differ from America’s Magnificent Seven. U.S. tech giants heavily rely on hyping AI bubbles and monopolizing computing power to attract investment. While companies like NVIDIA and OpenAI once led in software and hardware, their closed-source strategies and exclusionary “small-yard, high-fence” competition have prevented cutting-edge AI from integrating with real-world applications, making GPT-4, once the most advanced AI in the world can only be used as a whip to intimidate workers. In contrast, DeepSeek’s open-source model democratizes AI, transforming it into a productivity tool that benefits all humanity. The results speak for themselves: OpenAI reported a $5 billion loss in 2024, while DeepSeek announced a staggering 545% profit margin.

Sources: DeepSeek-R1 paper

From EV to AI, China prioritize accessibility over premium pricing and never try to maintain dominance through tariff and discrimination policies. This is because, rooted in the Eastern wisdom of “the highest good is like water,” the Chinese understand that “The only way to ensure a single drop of water never dries up, is when it merges into the sea.”

Thus, when China sets a 5% growth target, Beijing aims not to shame Western nations nor exclude competitors from its vibrant market. As the world’s largest exporter of industrial goods, China’s prosperity and the world’s prosperity are mutually reinforcing.

Editor: Charriot Zhai