CCP’s Two Sessions Economic Data Criticized as Political Farce, Military Spending Draws Attention

On March 5, 2025, the National People’s Congress of the Chinese Communist Party (CCP) convened with Premier Li Keqiang delivering a government work report. Overseas experts noted that the economic targets outlined in the CCP’s report for 2025 are considered more for political propaganda rather than reflecting economic realities. The strategy of “issuing bonds to rescue the market” has been criticized for its significant risks. Additionally, the consistent high military expenditure compared to economic growth has raised concerns.

Premier Li Keqiang stated in the government work report that the key expected targets for 2025 include: maintaining GDP growth at around 5%; urban surveyed unemployment rate at around 5.5%; creating over 12 million new urban jobs; and keeping the consumer price index (CPI) increase at around 2%.

Li also mentioned that this year’s deficit ratio is expected to be around 4%, an increase of 1 percentage point from the previous year. The deficit scale is projected to be 5.66 trillion yuan, an increase of 1.6 trillion yuan from the previous year.

The report further indicated plans to issue long-term special government bonds worth 1.3 trillion yuan, an increase of 300 billion yuan from the previous year; issuing special government bonds worth 500 billion yuan to support capitalization of state-owned large commercial banks; arranging special local government bonds amounting to 4.4 trillion yuan, an increase of 500 billion yuan from the previous year, primarily for investment in construction, land storage and acquisition of existing commercial housing, and clearing local government debts to enterprises. The total newly added government debt scale for this year amounts to 11.86 trillion yuan, an increase of 2.9 trillion yuan from the previous year.

Despite official controls, some netizens on social media platform Weibo expressed skepticism regarding these targets. They questioned the feasibility of a 4% deficit ratio for 2025 compared to the 3% ratio in 2024, and raised concerns about the lack of actual economic recovery. Economists like Huang Dawei pointed out that the 5% GDP growth target is more of a political show rather than a reflection of economic reality.

According to China expert Wang He, setting a 5% GDP growth target for 2025 serves as a political indicator to support the completion of the “14th Five-Year Plan” (2021-2025). The disconnect between these targets and economic conditions reflects a pattern of inflated official figures that lack practical significance.

Wang noted that the CCP’s annual targets, including the CPI goal of a 2% increase for this year, are often detached from economic operations. The discrepancy between targets and economic realities has made these annual reports more of a political gesture rather than a reflection of actual economic conditions.

Regarding the continually expanding fiscal deficit of the CCP government, economist Huang Dawei explained that slow economic growth hampers revenue collection, leading to increased deficits and debts to cover essential expenses. However, this method merely serves to sustain immediate spending needs rather than drive authentic economic growth. This overreliance on debt issuance poses significant fiscal risks given China’s already substantial hidden debts.

Furthermore, the consistent growth of the CCP’s defense budget has drawn international attention. The Ministry of Finance revealed that this year’s military budget is 1.78 trillion yuan, a 7.2% increase compared to the previous year and the fourth consecutive year with over 7% growth since 2022. This raise in military spending, surpassing economic growth, reflects Beijing’s strategic intentions to enhance military capabilities and potentially exceed a budget of 2 trillion yuan when including hidden expenditures.

Analyzing these trends, military analyst Su Ziyun stated that China’s ambitious military growth aims at securing maritime dominance and pursuing potential operational advancements. The actual military budget, estimated to be 1.4 times higher when factoring in hidden expenditures, underlines China’s aggressive military modernization efforts.

The CCP’s emphasis on reunification efforts and opposition to Taiwan independence was reiterated in Premier Li’s work report, aligning with their stance on maintaining peace and pushing for reunification.

In light of the ongoing U.S.-China tech competition, AI emerged as a prominent topic during this year’s “Two Sessions.” Premier Li highlighted the increasingly complex global environment and its potential impact on China’s trade and technology sectors.

According to Su Ziyun, departments like the National Development and Reform Commission might receive more budgets, as evident from Xi Jinping’s recent meeting with suppressed private tech entrepreneurs. However, China’s focus on centralized efforts and technological advancements may yield limited results in the face of competition with the U.S.

While China may gain some advantages in technology, the core superiority remains with the free and democratic world. For instance, China’s Deepseek AI was found to be built on Open AI’s framework, indicating a reliance on software architecture rather than genuine hardware capabilities.

Ultimately, as China continues to navigate economic challenges and military expansions, vigilance from the international community remains crucial in monitoring CCP’s actions and intentions.