March 17, 2025

China’s Economy at a Glance – March 2025

China keeps growth target unchanged and rolls out a consumption plan, but will it actually be delivered?

Overview

  • As widely expected, Premier Li unveiled an unchanged growth target for 2025 at March’s National People’s Congress – at “around 5%” – despite the persistent domestic economic challenges and the growing headwinds to trade. Subsequently, the State Council announced a 30-point plan of “special initiatives to boost consumption”. As announced, the plan is relatively light on detail – with statements around vigorously boosting consumption, promoting reasonable wage growth and generating effective demand through high-quality supply sounding similar to previous announcements over the years. One area which we see as potentially positive is increases to pensions and medical insurance for rural and retirees – as, if this is implemented at a sufficient level, it could reduce the need for households to save as a form of self-insurance. That said, until we see any of these policies actually implemented – particularly as much of the plan is allocated to financially constrained local governments to implement – our forecasts remain unchanged. We see China’s economy growing by 4.6% in 2025 and 4.2% in 2026.
  • China’s industrial production increased by 5.9% yoy in January-February, with growth easing marginally from the 6.2% yoy increase in December. Since late 2024, industrial production growth has been trending around its pre-pandemic rates.
  • Real fixed asset investment rose by 6.3% yoy in January-February (up from 4.5% yoy in December). In nominal terms, state-owned enterprises (SOEs) have continued to drive growth, while real estate remains a drag.
  • China’s trade surplus pulled back from its seasonal peak in December – averaging US$85.3 billion a month across January-February (down from a record high of US$104.8 billion in December). By historical standards, the surplus across this period remains comparatively large.
  • Real retail sales rose by 4.1% yoy over the first two months, up from 3.6% yoy in December. This represents a considerable improvement from the lows recorded during mid-2024, but remains weak when compared with the rates seen pre-pandemic.
  • Following a sizeable contraction in 2024 (down by 9.4%), China’s new credit issuance saw a pickup in the first two months of 2025 – rising by 16.6% to total RMB 9.3 trillion. That said, bank lending remained weak, contracting by around 1.9%, while government bond issuance surged by 166% yoy.

For further details please see China’s economy at a glance (17 March 2025)

Preparing for an AI futurePreparing for an AI future

Preparing for an AI future

29 April 2025

Rising artificial intelligence could see as much as half the work being done today automated within 20 years and organisations need to know how to get ready, an AI expert tells NAB’s Transaction Banking customer event series.

Preparing for an AI futurePreparing for an AI future

Article