China aims to achieve an economic growth rate of 5% in 2025, as announced by Beijing on Wednesday. Analysts believe this reflects Beijing’s ambition for continued military modernization and its response to growing geopolitical challenges.

Premier Li Qiang presented this figure in a report at the opening session of the National People’s Congress, China’s annual legislative meeting.

US President Donald Trump has imposed a 10% tariff on Chinese goods in February, which increased to 20% on Tuesday. China has retaliated with its own tariffs on US goods and vowed to fight the trade war until a “bitter end.”

The trade tensions come amid sluggish GDP growth and declining domestic consumer demand in China, caused by a collapse in the real estate market.

The International Monetary Fund predicts China’s economy to grow 4.6% in 2025, compared to 5% in 2024.

Beijing to Increase Defense Spending

China intends to increase its defense spending by 7.2% in 2025, maintaining steady growth in the sector despite challenges for the Chinese economy.

The draft budget was also presented at the National People’s Congress, China’s parliament, where the same increase was announced last year.

China’s defense budget has more than doubled since 2013, shortly after President Xi Jinping took power. China is the world’s largest military spender after the US.

Edited by: Rana Taha