2025 Chinese Government Work Report takeaways: Domestic demand, technological self-reliance and high-level opening-up

China’s annual "Two Sessions" – the convening of the National People's Congress (NPC) and

the National Committee of the Chinese People's Political Consultative Conference (CPPCC) – is in full swing, setting the stage for the nation's social, economic, fiscal and legislative policy plans for 2025. This year's sessions mark the final year of China's 14th Five-Year Development Plan.

To help multinational businesses better understand the policy landscape and seize growth opportunities, SEC Newgate has compiled key takeaways from this year’s Chinese Government Work Report.

GDP target signals increased policy support

Despite global headwinds, China has set its GDP growth target at “around 5%” again this year. This move reflects the government's continued confidence and is underpinned by a stronger policy push to drive domestic demand, industrial transformation and home-grown innovations. While some will view the 5% GDP growth target as modest, it demonstrates the country’s prioritisation of sustainable and high-quality growth over rapid expansion.

Boosting domestic demand, a top priority

This year, boosting domestic demand has replaced industrial modernisation as China's top priority, with 19 out of 31 provinces listing it as part of their 2025 action plans – nearly four times more than the year prior. The government intends to enhance consumer spending by optimising the supply of goods and services, addressing product quality concerns and strengthening consumer protections.

Key sectors earmarked for expansion include elderly care, early childhood education, household services as well as digital, green and smart consumption opportunities. Further initiatives include boosting cultural, tourism and sports consumption while enhancing duty-free policies to encourage inbound spending.

In addition to the existing programmes that allow people to trade in and replace consumer goods such as kitchen appliances, cars, phones and electronic devices, the government is introducing several innovative measures to boost consumption. In eight first-tier cities, including Chengdu, Tianjin, Wuhan and Xi’an, the government plans to establish duty-free shops within city limits, beyond just airports, to make duty-free shopping more accessible.

Additionally, a special treasury bond issuance of CN¥1.3 trillion (US$179 billion) is earmarked to fund these stimulus measures this year.

As part of the efforts to enhance consumption, China plans to increase investment in the service sector and implement new mechanisms for public-private partnerships. The latter will allow more private capital into crucial infrastructure and social welfare projects, further bolstering domestic demand.

Technological self-reliance through innovation

China remains steadfast in its commitment to cultivating emerging and future industries, driving domestic innovation and enhancing technological self-reliance. This includes the large-scale deployment of new technologies, the development of AI in various industries and business sectors and a low-altitude economy¹. Dedicated funding mechanisms will be established to support future industries such as biomanufacturing, quantum technology, embodied artificial intelligence and 6G technology.

Shenzhen serves as a prime example. A hub for technological innovation and home to global giants such as Huawei, BYD and Tencent, the Shenzhen municipal government will raise CN¥4.5 billion (about US$620 million) through multiple channels to support initiatives such as computing power vouchers, model vouchers, data vouchers, scene-based subsidies and scientific research and development (R&D). This funding will provide a subsidy of up to 60% for start-up enterprises to access computing power.

Additionally, the city is poised to introduce more specialised policies to promote the development of humanoid robots. Shenzhen currently has a 10-billion-yuan (US$1.38 billion) fund dedicated to artificial intelligence and robotics, focusing on investing in high-growth enterprises to drive further innovation and expansion in these fields.

These efforts aim to create an independent and self-reliant innovation ecosystem by digitising the economy, nurturing top talent, directing investment/government funding towards key fundamental scientific research and studies and encouraging top technology companies to lead on critical R&D projects.

High-level opening remains pivotal

This year’s report underlines China's continued commitment to a high-level opening. In his address, Premier Li Qiang highlighted the importance of improving financial services, expanding export credit insurance and supporting cross-border e-commerce and overseas

warehouses.

Alongside this, the government will focus on strengthening trade cooperation zones and integrating domestic, foreign, green and digital trade. Over 70% of Chinese provinces listed

"opening up" measures among their top priorities, more than double last year’s number,

reflecting concerted efforts to deepen economic integration with regional and global partners.

Nanning, the capital city of Guangxi (situated adjacent to Vietnam), is an example of this inaction. According to this year’s 2025 work report, Nanning is poised to further strengthen its cooperation with ASEAN by accelerating the development of key open platforms, including the Guangxi Free Trade Pilot Zone, the China-ASEAN Information Harbor and the financial gateway targeting ASEAN countries.

The "Invest in China" programme, launched in 2024, also continues to be actively promoted, with more pilot programmes to open up key sectors and industries like telecommunications, health care and education.

Foreign firms will be guaranteed equal treatment with domestic firms in procurement, regulation and licensing. The recent approval of 13 foreign firms to provide value-added telecom services in major cities like Beijing, Shanghai, Hainan and Shenzhen exemplifies this

commitment.

[1] A low-altitude economy refers to a comprehensive economic ecosystem centred around activities, businesses and services conducted within low-altitude airspace, typically defined as a space below 1,000 m. (or up to 3,000 m. depending on regional needs). This emerging sector is primarily driven by advancements in drone technology and the concept of Advanced AirMobility (AAM), encompassing various applications such as urban air transportation, logistics, agriculture and emergency services.

Contact:

James Hill, Managing Partner james.hill@secnewgate.hk

Victoria Guo, Partner, Head of Shanghai victoria.guo@secnewgate.cn