China aims for 5% economic growth despite US tariffs

Premier Li Qiang presented the figure in a report at the opening session of the National People’s Congress, the annual meeting of China’s legislature.

US President Donald Trump has announced a 10% tariff on Chinese goods in February, which increased to 20% on Tuesday. China has retaliated with its own tariffs on US goods and vowed to fight the trade war to a “bitter end.”

The renewed trade tensions come as China is dealing with sluggish GDP growth and declining domestic consumer demand, brought on by a collapse in the real estate market.

Joint session of Congress

US President Trump has addressed a joint session of Congress started by saying “we’re only getting started” as several people walked out.

“Tariffs are not just about protecting American jobs, but protecting the soul of our country,” says Trump, adding that the steep levies he has and will impose on goods from other countries will help fulfil his pledge of “making America rich again”.

“There will be a little disturbance but we’re OK with that. It won’t be much,” he says.

On Monday, Taiwan Semiconductor Manufacturing Company promised to invest at least $100b to grow its US manufacturing operations.

The International Monetary Fund (IMF) has predicted China’s economy to grow 4.6% in 2025, down from 5% in 2024.

China aims for 5% economic growth despite US tariffs by boosting defense spending

China will also boost its defense spending by 7.2% in 2025, maintaining a steady increase in the sector’s growth as the Chinese economy faces challenges from both home and abroad.

The draft budget was also presented during the country’s rubber-stamp National People’s Congress (NPC) parliament. The same 7.2% increase was announced last year.

China’s defense budget has more than doubled since 2013, shortly after President Xi Jinping came to power. The Asian superpower is the world’s biggest military spender after the US.

Reunification with Taiwan

The country’s increasing defense spending is a rising concern to the self-ruled island of Taiwan, which China considers as part of its territory. Beijing has previously not ruled out the use force if necessary, all while ramping up war games around the island.

In Wednesday’s annual report, Chinese Premier Li Qiang wrote: “We will firmly advance the cause of China’s reunification and work with our fellow Chinese in Taiwan to realise the glorious cause of the rejuvenation of the Chinese nation.”

Last year, Li had replaced the descriptor “peaceful” with wanting to “be firm” while speaking of reunification with Taiwan.This year, he has a new mention of wanting to work with “fellow Chinese in Taiwan” to rejuvenate the nation.