China's government work report this year set a growth target of 4.5% to 5%, with an emphasis on striving for a better outcome in practical work. This goal sends a strong signal of steady progress and pragmatic optimism for the Chinese economy. There is widespread global interest in understanding the magnitude of the impetus this target would provide to China's economy and its subsequent impact on the world economy.
The driving force of China's economy is first reflected in the push from its aggregate economic size. With China's total economic output now exceeding 140 trillion yuan, a 1 percentage point growth rate today generates an increment equivalent to about 2.1 percentage points a decade ago. An economic growth rate of 4.5% to 5% would correspond to an economic increment surpassing 6 trillion yuan, equivalent to the annual GDP of a medium-sized economy.
Looking ahead over the next decade, calculations based on the goal of basically realizing socialist modernization by 2035, and considering the projected total population for that year, indicate that China's GDP needs to grow at an average annual rate of 4.17% over the coming ten years. The 4.5% to 5% growth target set for the first year of the 15th Five-Year Plan period exceeds this average requirement, providing a solid foundation for achieving the long-range objectives through 2035.
From a global perspective, the impetus generated by 4.5% to 5% growth means China will continue to be a primary contributor and a stabilizing anchor for world economic growth. As the world's second-largest economy, China has contributed over 30% to global growth for many consecutive years. Research from the International Monetary Fund indicates that a 1 percentage point growth in China's economy boosts the output level of other economies by an average of 0.3 percentage points. Growth of this magnitude will open significant new avenues for global economic expansion.
More encouragingly, the driving force of China's economy is increasingly manifested as a push for higher-quality development. The growth China is achieving today is built on solid, substantive strength. High-quality development has become the central theme of China's economic narrative, with the engines of growth rapidly shifting towards innovation-driven expansion. New quality productive forces are burgeoning, forming the hard power that positions China to play a leading role in the new round of technological revolution and industrial transformation.
The government work report outlines specific tasks beneath its overarching goals, including fostering emerging pillar industries such as integrated circuits, aerospace, biomedicine, and the low-altitude economy. The output value of these sectors is projected to expand to over 10 trillion yuan by 2030. The report also emphasizes deepening and expanding the "Artificial Intelligence Plus" initiative, aiming for the AI-related industry scale to grow to over 10 trillion yuan by the end of the 15th Five-Year Plan period. In 2024, the added value of China's "Three New" economy—new industries, new business forms, and new models—already accounted for more than 18% of GDP. As resources increasingly flow towards new technologies, applications, and business models, facilitating continuous upgrading and quality improvement, China's economic foundation will become more stable and its momentum stronger.
The unprecedented impetus generated by the accelerated formation of new quality productive forces is transforming China's economic landscape into a global "innovation arena" and a "training ground" for enterprises. Examples include Schneider Electric establishing five R&D centers in China and Qualcomm collaborating with Chinese industry partners to explore 6G technology pathways. Tapping into the Chinese market for opportunities and innovation has become a strategic choice for foreign companies to sow seeds for future growth. The Chinese market is consistently empowering global innovation.
At a deeper level, the driving force of China's economy also demonstrates a push for a distinct development model. An economy driven primarily by domestic demand and characterized by internal circulation is a hallmark of a major economy. From 2013 to 2024, domestic demand contributed an average of 93.1% to China's economic growth. During the 14th Five-Year Plan period, China's consumer market size ranked first in the world when measured by purchasing power parity, highlighting the increasingly prominent role of consumption as the main engine of growth.
As China enters the 15th Five-Year Plan period, it is intensifying efforts to foster an economic development model that is more dominated by domestic demand, driven by consumption, and characterized by endogenous growth. The government work report prioritizes "focusing on building a strong domestic market" as the top task for the year. As relevant policies are implemented in detail, China's supersized market will further become a "fertile field" and "abundant sea" for investors and entrepreneurs, brimming with vast, untapped potential for new growth areas in domestic demand waiting to be cultivated.
Sustaining long-term momentum hinges on steadfastness and strategic resolve. A defining feature of China's governance is the stability and continuity of its planning, which is also a significant contribution of the Chinese development model to the world. Unlike some countries characterized by policy volatility and frequent shifts in plans, China adheres to guiding its development with medium- and long-term plans. From the 1st Five-Year Plan to the 15th, the nation has consistently anchored its efforts to the overarching goal of modernization, advancing step by step with persistent effort to ensure stable and long-term development.
At this year's National People's Congress sessions, two key agenda items drew significant attention: the review of the draft outline for the 15th Five-Year Plan and the deliberation of the draft National Development Planning Law. The combination of sound planning and effective execution transforms the "impetus" of China's economy into the "endurance" that underpins long-term, stable socio-economic development, and the "leadership" that guides globalization towards a more inclusive and beneficial direction for all.
Setting out from the "gathering in spring" towards a hopeful future, we will collectively witness a new leap forward for the Chinese economy when the harvest season arrives.
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