Sinobravo Policy Express (January, 2025)

2025-02-05

Editor's Note:

In 2024, the introduction of a series of incremental policies effectively boosted social confidence and led to a notable economic recovery. New economic drivers gathered momentum, the economic structure continued to optimize, and the key targets for economic and social development were successfully achieved. According to preliminary calculations by the National Bureau of Statistics, the country's GDP for the year was 13.49 trillion yuan, a 5.0% increase from the previous year at constant prices. This solid foundation sets the stage for the smooth development of economic work in 2025 and enhances our ability to push for high-quality development and face challenges head-on.

2025 marks the final year of the 14th Five-Year Plan. The favorable factors for China's economy, such as its stable foundation, multiple advantages, strong resilience, large potential, and long-term growth prospects, remain unchanged. The vast market and complete industrial system continue to be strong pillars for economic development. Emerging infrastructure like 5G, computing power, and energy storage is being rapidly deployed, and new industries and digital economy will continuously inject vitality into high-quality economic growth. Policies such as “boosting consumption,” “expanding the scope of ‘new’ policies,” and “greater support for ‘dual-weight’ projects” are expected to accelerate, unleashing the full potential of domestic demand, laying a solid foundation for economic improvement.

Economic Performance:

On January 17th, the National Bureau of Statistics released data on China's economic performance for 2024, showing stable overall economic operation and progress toward key goals:

GDP Growth: In 2024, GDP reached 13.49 trillion yuan, increasing by 5.0% at constant prices compared to the previous year.
Agricultural Output: Grain production reached a new high with a total output of 70.65 million tons, a 1.6% increase from the previous year. The production of pork, beef, mutton, and poultry totaled 96.63 million tons, growing by 0.2%.
Industrial Production: Industrial output grew steadily, with the value added of industries above designated size increasing by 5.8%. In December, the growth was 6.2% year-on-year, and 0.64% month-on-month, with equipment manufacturing and high-tech manufacturing seeing faster growth.
Service Sector: The service sector saw continuous growth, with the value added increasing by 5.0% year-on-year. In December, the service production index grew by 6.5% year-on-year.
Retail Sales: Retail sales of consumer goods increased by 3.5% year-on-year.
Fixed Asset Investment: Fixed asset investment reached 51.437 trillion yuan, a 3.2% increase from the previous year. Investment in high-tech industries grew by 8.0%, and private sector investment increased by 6.0%.
Trade Growth: The total value of goods imports and exports reached 43.85 trillion yuan, growing by 5.0% year-on-year. Exports totaled 25.45 trillion yuan, increasing by 7.1%, while imports reached 18.39 trillion yuan, growing by 2.3%. Trade with countries along the “Belt and Road” grew by 6.4%.
Price Stability: The Consumer Price Index (CPI) rose by 0.2% year-on-year. Industrial producer prices and purchase prices decreased by 2.2%. In December, industrial producer prices decreased by 2.3% year-on-year and 0.1% month-on-month.
Employment: The urban unemployment rate averaged 5.1% for the year, a slight improvement from the previous year. The rate stood at 5.1% in December.
Income Growth: The per capita disposable income of residents reached 41,314 yuan, a 5.3% nominal increase from the previous year.
Population: The total population stood at 1.40828 billion at the end of the year, a decrease of 1.39 million from the previous year. The urbanization rate increased to 67.00%, up by 0.84 percentage points.

Policy Environment

High-Level Interactions

On January 21st, President Xi Jinping held a video meeting with Russian President Vladimir Putin, emphasizing the need to deepen strategic cooperation and maintain mutual support to protect the legitimate interests of both countries. They also exchanged views on international and regional issues of common concern.
On January 17th, President Xi Jinping spoke by phone with U.S. President-elect Donald Trump, stressing the importance of mutual respect, peaceful coexistence, and cooperation. Both sides agreed to establish a strategic communication channel for regular exchanges on major issues of mutual interest.
On January 15th, Premier Li Qiang met with a delegation from Japan’s ruling party, led by Secretary-General Toshihiro Nikai and Chairman of the Komeito Party’s Policy Research Council, Yoshihide Suga. Premier Li emphasized that both parties should focus on promoting cooperation and common development, leveraging the complementary advantages of their economies and strengthening supply chain stability in areas such as technological innovation, digital economy, and green development.
On January 20th, Xi Jinping's special representative, Vice President Han Zheng, attended the inauguration of President Donald Trump in the U.S. During his visit, Han Zheng met with Vice President-elect Mike Pence and representatives from the U.S. business community, including Tesla CEO Elon Musk.
On January 21st, Ding Xuexiang, a member of the Political Bureau of the Central Committee and Vice Premier, attended the 2025 World Economic Forum Annual Meeting in Davos, delivering a speech on “Upholding Multilateralism and Promoting Inclusive and Open Development.” Ding Xuexiang highlighted China’s commitment to further opening up and creating an increasingly favorable business environment, welcoming foreign companies to invest and thrive in China.
On January 11th, Vice Premier He Lifeng co-hosted the 11th China-UK Economic and Financial Dialogue with British Chancellor of the Exchequer Jeremy Hunt. He Lifeng expressed China’s willingness to work with the UK to implement the leaders’ important consensus and strengthen communication, expanding economic and financial cooperation.
On January 7th, Vice Premier He Lifeng held a video conference with U.S. Treasury Secretary Janet Yellen. They discussed the implementation of key agreements reached between the Chinese and U.S. Presidents and the importance of maintaining economic stability during the transitional period.
On January 8th, Vice Minister of Commerce and Chief Trade Negotiator Wang Shouwen met with Sands China Chairman and CEO Sheldon Adelson to discuss China-U.S. economic and trade relations.
On January 21st, Vice Minister of Commerce, Ling Ji, chaired a roundtable meeting with European business representatives in China, emphasizing the solid foundation of Sino-European economic and trade cooperation.

Outbound Direct Investment (ODI)

In 2024, China’s non-financial foreign direct investment (FDI) totaled USD 143.85 billion, a 10.5% increase year-on-year. The value of newly signed foreign contracted projects reached USD 267.3 billion, setting a new historical high.

Foreign Investment (FDI)

The People's Bank of China issued a joint opinion with the Ministry of Commerce on advancing international high-standard opening-up in the financial sector in qualified free trade zones.

Taxation

The Ministry of Finance issued a notice adjusting the "zero tariff" policy for raw materials in the Hainan Free Trade Port to support its development and expand the range of zero-tariff products.
The State Taxation Administration issued a draft of the “Comprehensive Income Tax Clearance Management Measures,” aiming to protect taxpayers' legal rights and standardize income tax clearance processes.
Shanghai introduced preferential tax policies for key industries in the China (Shanghai) Free Trade Zone Lingang New Area, providing a 15% corporate tax rate for qualified enterprises.
Beijing introduced measures for water resource tax reform, imposing a higher tax rate on excessive water usage.

Please click on the link below to read more about industry trends: 中富博睿政策速递（2025年1月刊）

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