Zongyuan Zoe Liu
2025 marks the conclusion of China’s 14th Five-Year Plan, a time for policymakers to present their scorecard and set goals for the next five years. To ensure a positive outcome, Chinese leaders will likely roll out active stimulus measures in the spring while continue pursuing self-sufficiency and technological advancement.
President Trump’s threat of steep tariffs is not the most significant challenge for Chinese economic policymakers. If Beijing can leverage rising tariffs to push domestic reform and increase household consumption, it can sustain balanced growth despite short-term pains. Even so, Beijing’s consumption-promotion measures will not sacrifice investment in strategic sectors. Chinese President Xi remains convinced that achieving self-reliance and technological advancement can heal economic woes, shake off the “Century of Humiliation,” and enshrine him as a paramount leader.
The real challenge for Chinese policymakers lies at home. While they have experience designing and implementing industrial policies, they struggle to mobilize Chinese consumers to spend to drive growth. Without fixing public pessimism about the economy, direct household cash handouts are unlikely to spur household spending over saving. Beijing’s biggest challenge is restoring policy credibility and market confidence.
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