A Preview of the Key Issues at the 2025 National Two Sessions Through Six “Key Words”

With the 2025 National People’s Congress and Chinese People’s Political Consultative Conference just around the corner, this year marks both the concluding year of the 14th Five-Year Plan and a pivotal moment for further deepening reform across the board. What can we expect from this year’s Two Sessions? Recently, reporters from the Economic Information Daily interviewed numerous industry insiders to offer a preview of the key issues and buzzwords likely to dominate the economic agenda at the Two Sessions.

  One of the key terms: the conclusion of the 14th Five-Year Plan.

  This year marks the final year of the 14th Five-Year Plan, and a new five-year plan is already on the horizon, making it a pivotal juncture that both builds on the past and ushers in the future.

  Looking ahead to this year’s Two Sessions, the focus of attention across all sectors will be on how policy measures will be further strengthened to ensure the high-quality implementation of the goals and tasks set out in the 14th Five-Year Plan and to lay a solid foundation for a strong start to the 15th Five-Year Plan.

  “In 2025, we will further strengthen the力度 of various policies to consolidate and reinforce the momentum of economic recovery, which will be highly conducive to ensuring a smooth transition between the 14th and 15th Five-Year Plans,” said Zhang Liqun, a researcher at the Department of Macroeconomic Research of the Development Research Center of the State Council. He noted that, particularly in the realm of fiscal policy, the Central Economic Work Conference held late last year set the tone as “more proactive” and outlined specific measures such as raising the fiscal deficit-to-GDP ratio and issuing government bonds on a larger scale. As a result, market attention has been focused on the relevant provisions in the Government Work Report, especially regarding the deficit-to-GDP ratio and the size of government bond issuance.

  Boosting the economic recovery and ensuring the effective implementation of key reform measures are also of paramount importance. Wang Tao, Head of Asia Economic Research and Chief China Economist at UBS, stated that policies are expected to emphasize deepening structural reforms in several critical areas, including fostering technological innovation and increasing R&D investment.

  Keyword No. 2: Boosting Consumption

  Among the nine key tasks identified at the Central Economic Work Conference for 2025, “vigorously boosting consumption, enhancing investment efficiency, and comprehensively expanding domestic demand” ranks first, with a special campaign to stimulate consumption also being launched. Industry insiders widely agree that expanding domestic demand is a long-term strategic priority, with boosting consumption taking center stage. It is expected that “stimulating consumption” will be one of the major topics of discussion at this year’s Two Sessions.

  Industry insiders believe that fiscal and tax policies supporting the trade-in of old consumer goods for new ones are likely to be strengthened. At the beginning of the year, the central government allocated an initial tranche of 81 billion yuan in 2025 funds for the trade-in program, helping local authorities ensure a smooth transition as the policy is rolled out. Lu Ting, Chief Economist for China at Nomura, noted that 150 billion yuan in ultra‑long-term special government bonds was earmarked in 2024 to support the trade-in initiative, and that in 2025, additional funding from these bonds is expected to further expand the scope and scale of large‑scale equipment upgrades and consumer‑goods trade‑ins.

  To boost consumption, the key is to closely integrate measures to stimulate spending with policies that improve people’s livelihoods. Efforts must be focused on strengthening consumers’ purchasing power and enhancing their willingness to spend.

  Zhang Yingxi, a researcher at the Institute of Financial Strategy of the Chinese Academy of Social Sciences, recommends improving the social security system to encourage residents to “dare to consume.” She notes that, from a top-level design perspective, it is essential to standardize the allocation of fiscal responsibilities between the central and local governments, increase investment in basic public services, and accelerate efforts to achieve equal access to these services. In particular, it is crucial to significantly enhance the level of support provided to middle- and low-income groups in key areas such as affordable housing, education, healthcare, social insurance, and elderly care, while ensuring the stability and continuity of relevant policies.

   Keyword No. 3: Artificial Intelligence+

  Since the beginning of this year, the domestically developed large model DeepSeek has rapidly gained widespread attention thanks to its open-source approach and cost advantages, drawing keen interest both at home and abroad. Companies including Baidu, Alibaba, Tencent, and ByteDance have all announced new initiatives in their respective AI large models and AI applications.

  Analysts believe that recent corporate developments signal new trends in the innovative advancement of artificial intelligence. Following the inclusion of the “AI Plus” initiative in the 2024 Government Work Report, “AI Plus” is expected to remain a key topic at this year’s Two Sessions.

  Gu Weixi, deputy director of the Intelligentization Research Institute at the China Academy of Industrial Internet, believes that launching the “AI Plus” initiative can accelerate the alignment between AI technology supply and application‑specific needs, better integrate technological innovation, application‑driven innovation, and the commercialization of research outcomes, bridge the “last mile” from the laboratory to industry, and foster a virtuous cycle driven by market demand.

  Data show that China currently has more than 4,500 AI companies, with the core industry’s scale approaching RMB 600 billion. The industry chain spans key upstream and downstream segments, including chips, algorithms, data, platforms, and applications.

  Going forward, relevant policy support will continue to be strengthened. For instance, the Ministry of Industry and Information Technology will encourage enterprises and research institutions to accelerate breakthroughs in computing power, algorithms, and data technologies, bolster the development of both general-purpose large models and industry-specific large models, and promote the deep integration of artificial intelligence with key sectors. Meanwhile, local governments are actively formulating targeted industrial policies and preferential measures, vying to establish AI‑focused industrial clusters.

  Keyword No. 4: Inflow of Medium- and Long-Term Capital into the Market

  Further unblocking bottlenecks and addressing key impediments, and vigorously encouraging the entry of medium- and long-term capital into the market, are crucial components of deepening the comprehensive reform of capital market financing and investment. Recently, the Central Financial Commission, the China Securities Regulatory Commission, and other relevant authorities jointly issued the “Implementation Plan for Promoting the Entry of Medium- and Long-Term Capital into the Market.” At this year’s National People’s Congress and Chinese People’s Political Consultative Conference, “the entry of medium- and long-term capital into the market” is expected to be one of the key topics drawing significant attention.

  Yang Delong, chief economist at Qianhai Open Source Fund, stated that policy measures should be employed to effectively extend the performance‑evaluation cycle for investment managers, enabling them to place greater emphasis on long-term returns without being unduly concerned about short-term volatility. At the same time, pension funds should be encouraged to increase their allocation to equity markets.

  Tang Zhehui, Co‑Head of Audit Services for Greater China at EY, stated that tax policies should be “long‑term friendly,” while the legal framework should ensure “stability and protection,” guiding long‑term capital toward key sectors of the real economy. The ultimate goal is to establish a virtuous cycle of “policy support—capital entering the market—enterprise growth—returns feeding back into the system,” thereby bolstering high‑quality economic development. Specifically, in the tax realm, tax incentives should be extended to long‑term investors, and dedicated laws and regulations governing the entry of medium- and long‑term capital into the market should be enacted, clearly defining the fundamental rules, rights and obligations, and regulatory framework for such investments. Moreover, the boundaries of responsibilities between long‑term capital and its managers must be clearly delineated, and violations such as “short‑term funds investing long‑term” or “maturity mismatches” should be rigorously sanctioned.

  Keyword No. 5: Private Economy

  The private sector is a vital driving force behind China’s path to modernization and an essential foundation for high-quality development. According to the latest data, private enterprises account for more than 92% of all businesses in the country, and among national high-tech enterprises, the share held by private firms has expanded to over 92%. The recent symposium on private enterprises sent a strong signal of support for the healthy and high‑quality development of the private sector.

  Industry insiders believe that “the private sector” is also expected to become one of the buzzwords at this year’s Two Sessions.

  Shen Yinghua, Tax Policy Managing Partner for EY Greater China, stated that small and medium-sized private enterprises are currently closely monitoring tax and fee reduction policies as well as accounts‑receivable collection issues, and they look forward to the introduction of more robust and targeted measures to support taxes and fees. Meanwhile, for private enterprises expanding overseas, they hope that relevant national authorities will provide stronger policy support and expert guidance to ensure a smooth and secure international expansion.

  Notably, China is accelerating efforts to enact the Law on Promoting the Private Economy. “This will provide crucial legal safeguards for the development of the private sector,” said Tan Haojun, a part-time professor at Zhongnan University of Economics and Law.

   Keyword Six: Countering Involution

  Recently, the State Administration for Market Regulation convened a symposium on fair competition with representatives from several enterprises, holding in-depth discussions with senior officials from seven companies on addressing “involutionary” competition. In addition, Beijing, Jiangsu, and Hunan have recently rolled out measures to curb such practices.

  According to experts, with the Central Economic Work Conference calling for “comprehensively addressing ‘involutionary’ competition and regulating the conduct of local governments and enterprises,” a series of measures at the ministerial and local levels has sent a clear signal: to optimize the market environment and prevent vicious competition driven by short-term gains. This year’s Two Sessions will further explore ways to tackle “anti‑involution.”

  Liu Xiangdong, Deputy Director of the Research and Information Department at the China Center for International Economic Exchanges, believes that curbing “involutionary” competition requires guiding industries and enterprises to move away from market‑entry strategies based on low prices, poor quality, and low costs, and instead embrace healthy competition driven by technological innovation and characterized by high quality and product differentiation. At the same time, it is essential to effectively regulate local investment‑attraction practices, fostering a more favorable business environment and a robust ecosystem for investment and innovation.

  Chen Quansi, director of the Research Office at the Institute for New‑Type Industrialization of the China Academy of Information and Communications Technology, believes that comprehensively addressing “involutionary” competition is a crucial step in transforming the mode of economic growth and innovating the path of productive forces development. The focus should be on standardizing local governments’ policies and measures for economic development and enterprise support, while strengthening regulatory enforcement against administrative monopolies and rigorously implementing the fair‑competition review system. (Reporters: Zhang Mo, Guo Qian, Wu Lihua)

[Editor-in-charge: Wang Mengmeng]

Source: Economic Information Daily