| I’m Malcolm Scott, international economics enterprise editor in Sydney. Today we’re looking at China’s economic targets for 2025. Send us feedback and tips to ecodaily@bloomberg.net or get in touch on X via @economics. And if you aren’t yet signed up to receive this newsletter, you can do so here. - The US is sketching out tougher versions of semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry.
- In Beijing, competition is in. In Washington, not so much.
- The ultimate scorekeepers of Elon Musk’s DOGE cuts are the bond investors on Wall Street. So far, they’re not all convinced — read the BigTake.
One of the most significant and tightly choreographed global economic events of the year will unfold in Beijing next week against the backdrop of a freewheeling US President who’s creating maximum uncertainty with his torrent of tariff threats. China’s National People’s Congress will get underway on March 5 when Premier Li Qiang delivers the Government Work Report — a formulaic document recounting how the world’s second-largest economy fared against its long list of targets and the goals for 2025 including for GDP, inflation, employment and the budget deficit.  Xi Jinping during the closing of the Second Session of the 14th National People’s Congress in March 2024. Source: Bloomberg Economists expect targets and policies that aim to bolster the domestic side of the economy in the face of growing global headwinds. A scan of reports from the likes of Goldman Sachs and UBS suggest we can expect the following: - GDP target of around 5% (though some economists expect a range of 4.5% to 5%)
- CPI target cut to 2% from 3%, a move Citigroup economists describe as a “mark-to-market” recognition of the current low inflation reality
- Deeper fiscal deficit target as part of what HSBC economist say will be a “punchier fiscal stance.” (They forecast the broad-based fiscal deficit is likely to expand
further to 9.1% of GDP, implying a fiscal impulse of 1.4 percentage point.) - With stability in the labor market a “bottom line” for policymakers, Goldman economists expect a target of “above 12 million” new urban jobs, which is largely in line with the number of college graduates this year.
- As for where the money will be spent, UBS point to an expanded trade-in program of consumer goods designed to spur consumption, corporate equipment upgrading and long-term projects, capital injections to banks, funds to support a local government financing vehicle debt swap and home inventory destocking. There may also be a subsidy scheme for families with young children and higher pensions for the aged.
Those targets and the policy proposals to ensure they’re met were hatched and debated behind closed doors over recent months, meaning they’re not swayed by the vagaries of the latest trade warnings out of Washington. Beijing takes a reactive rather than proactive approach to US trade policy — perhaps the strategy leaders in Canada and Mexico must also adopt in the face of on-again, off-again tariff threats. Yet the problem confronting Premier Li and President Xi Jinping is that they’re outlining the nation’s policy plans weeks before a suite of investigations into China’s trade practices land on President Donald Trump’s desk on April 1, which may herald an escalation in the trade war. That means some economists are already pointing to the April politburo meeting, rather the NPC, as the gathering at which specific policies are developed to offset the economic drag from any tariff escalation. The Best of Bloomberg Economics | - Coming up: US Treasury Secretary Scott Bessent will meet Australian Treasurer Jim Chalmers in Washington to talk tariffs.
- Federal Reserve Bank of Dallas President Lorie Logan would favor buying short-term assets when the US central bank resumes purchases.
- Germany is considering a lame-duck session of parliament to approve as much as €200 billion in special defense spending.
- A key measure of euro-area pay growth eased at the end of 2024, supporting ECB plans to keep lowering interest rates. Meanwhile, Bundesbank chief Joachim Nagel told his colleagues to stop openly discussing their preferences.
- The Bank of Korea cut its key rate to support an economy jolted by political turmoil and threatened by US tariff plans. Hungary is predicted to hold.
- India’s economy is likely to rebound after recent weakness, although growth remains well below its potential, its ex-central bank governor said.
WFH wouldn’t have been an acronym recognizable to the public back in 2019. But now, work-from-home is well entrenched in the US economy, accounting for one quarter of all paid workdays, a new paper from the National Bureau of Economic Research shows. A quartet of economists at Stanford and the Instituto Tecnologico Autonomo de Mexico pored over an array of different surveys and studies to compile a snapshot of WFH from 2023 to 2025. They found that WFH varies widely depending on a number of factors. It especially depends on the nature of the work — including the industry, education level involved and where in life-cycle career progression the job sits. (The analysis pre-dates the recent Trump administration return-to-office push.)  An 'Offices To Let' sign outside a commercial property in the City of London, Oct. 25, 2023. Photographer: Chris Ratcliffe/Bloomberg “Men and women WFH at similar rates, and the modest gap between them is partly explained by differences in education, industry, and occupation,” the economists wrote. “We find more robust patterns by age and education, with workers in their 30s to early 40s exhibiting higher desired and actual WFH rates than younger and older workers. College-educated workers have much higher actual and desired WFH rates than their less-educated counterparts.” |
