China loosens fiscal and growth targets ahead of next 5-year plan

The government raised the ratio for the budget deficit as a share of gross domestic product to 4%, as our first chart shows. That's an increase from 3% in 2024.

Meanwhile, as our subsequent charts show, the growth targets for most of China's 31 provinces have been reduced -- reaching the lowest (on average) since 2002. (This measure peaked in 2012-13, when the government sought 10%+ growth on average.) Hainan is seeing the biggest reduction, at 2 percentage points. Tianjin is the positive outlier, with a 0.5 percentage-point increase.

2025 is the final year of the 14th Five-Year Plan. As the government prepares for the 2026-2030 plan, it continues to roll out moderately accommodative monetary policies, e.g., timely reserve requirement ratio (RRR) cuts and interest-rate reductions; the People's Bank of China emphasized that there is still room for both. (Our previous data story on China's stimulus program and the money supply is linked here.)

The inflation target has been revised downward too, however, as the government seeks to enhance consumers' purchasing power. Boosting consumption will also be targeted in the "trade-in policy" for consumer goods, which will be expanded from 150 billion yuan in 2024 to 300 billion yuan in 2025. This subsidy program had increased sales of household electric appliances, and will be expanded to include smartphones, tablets and other digital products.

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