Asia Daily Two Sessions Edition: March 6, 2025
Welcome to a special edition of Asia Daily focused on China’s annual Two Sessions (lianghui) meetings! For the next week, The Asia Cable will be providing daily news and commentary updates surrounding the National People’s Congress and the Chinese People's Political Consultative Conference as China sets its legislative agenda for the next year. Tomorrow’s schedule can be found here.
As China's 'employment problems' mount, Premier Li vows to create jobs, ward off poverty. Premier Li Qiang set a target of creating over 12 million urban jobs in 2025 while keeping unemployment around 5.5%. He warned of growing structural employment challenges and risks of poverty resurgence. Analysts highlight weak private sector job growth and difficulties for migrant workers. Beijing aims to boost employment through tech innovation and support for rural laborers. Mandy Zuo, South China Morning Post, March 6
Two Sessions: China’s GDP target unchanged as deficit projection hits record high. China maintained its 5% GDP growth target for 2025 while setting a record-high fiscal deficit of 4% of GDP. Premier Li Qiang emphasized boosting domestic demand, stabilizing real estate, and navigating global trade challenges. This comes alongside the government’s plans to create 12 million urban jobs, increase infrastructure investment, and issue ultra-long special treasury bonds to support growth. Qing Na, Caixin Global, March 5
China announces plans for steel output cuts to help restructure industry. Beijing will implement production cuts to address overcapacity in its steel sector, though no specific targets were announced. Analysts speculate reductions could reach 50 million metric tons. The move follows rising global trade tensions as Vietnam and South Korea imposed anti-dumping duties on Chinese steel. Domestic demand remains weak due to the ongoing property slump. Amy Lv and Lewis Jackson, Reuters, March 5
China widens fiscal window to step up spending, counteract US tariffs. Beijing raised its deficit target to 4% of GDP, the highest in history, to boost stimulus and offset the impact of new US tariffs. Premier Li Qiang announced plans to issue more debt, increase infrastructure spending, and support struggling sectors like real estate. Economists predict a modest stimulus effect, with further measures possible later in the year. Ji Siqi, Sylvia Ma, South China Morning Post, March 5
China’s Xi Jinping makes tech and private sector appeal on ‘two sessions’ sidelines. President Xi Jinping called for greater integration of technology and industry while reaffirming support for private businesses. Addressing deputies from Jiangsu province, he stressed the need to upgrade traditional sectors and boost emerging industries like AI and quantum technology. China also increased its science budget by 10% to $54 billion, underscoring its commitment to innovation despite escalating U.S. tariffs. Mia Nulimaimaiti, South China Morning Post, March 5
China’s bigger diplomatic budget underlines global push, unlike Trump’s ‘America first.’ Beijing increased its foreign policy budget by 8.4% to $8.87 billion, prioritizing diplomacy, Belt and Road projects, and ties with the Global South. Premier Li Qiang reaffirmed China’s commitment to multilateralism amid U.S. isolationist policies. Analysts see the budget rise as a signal of China’s expanding global influence, contrasting with Washington’s retrenchment. Dewey Sim, South China Morning Post, March 5
At ‘two sessions,’ China takes aim at an insidious economic foe: ‘neijuan.’ Premier Li Qiang pledged to crack down on “neijuan,” or involutionary competition, which has led to price wars and overcapacity in industries like EVs and solar energy. Beijing aims to introduce regulations to curb excessive competition and market fragmentation. Analysts suggest stricter government intervention may follow, though its impact on investment remains uncertain. Luna Sun, South China Morning Post, March 5
What was Xi’s message to Jiangsu’s delegation? Top leaders back Xi, warn of complex, severe environment. Xi Jinping told Jiangsu’s delegation at the National People’s Congress that developed provinces must lead in innovation, industrial upgrades, and economic reforms. He stressed integrating technology with industry, improving the business environment, and countering excessive competition. Leaders echoed his concerns, emphasizing the need for economic stability and policy alignment amid global uncertainty. Manoj Kewalramani, Tracking People's Daily, March 6
China's 'Two Sessions' places greater emphasis on Taiwan integration: experts. China's government work report reiterated opposition to Taiwan independence and external interference while emphasizing cross-strait economic and cultural exchanges. Experts noted that while the Taiwan-related content remains largely unchanged from last year, there is a stronger push for integration. Analysts suggest Beijing’s real policy signals may come from Xi Jinping’s remarks or a potential Anti-Secession Law commemoration. Li Ya-wen and Sunny Lai, Focus Taiwan, March 5
Tariffs to climate: the big takeaways from China’s Two Sessions. China set a 5% GDP growth target for 2025 while expanding fiscal support to counter U.S. trade pressures. Premier Li Qiang announced measures to stabilize foreign trade, boost household consumption, and create over 12 million urban jobs. Policies will also support real estate recovery and financial markets. China reaffirmed its commitment to peaking carbon emissions and enhancing global climate cooperation. Sixth Tone, March 5