China Market Insider These are China's economic priorities for 2025

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Beijing's priorities for its economic course have just been readjusted. Among other things, it involves more artificial intelligence and even more green transformation.

At the annual plenary session of the National People's Congress (NPC) in Beijing, which began on March 5, the key trends that are important for foreign companies in the People's Republic this year are recognizable. From the perspective of the German and European industry, its opportunities and challenges due to China's economic development, three trends are particularly relevant.

Trend 1: Even stronger focus on future technologies

First, it is clearly evident that the Chinese leadership feels validated by the "Deepseek moment" in its decision to focus even more than before on science and technology, new future technologies, and simultaneously the modernization of its traditional manufacturing industry.

The new concept of "high-quality productive forces" was already presented at the NPC session. This concept relates to key growth areas of the economy, such as artificial intelligence, biotechnology, and big data, which are driven by high-tech. The release of the LLM "R1" by Deepseek has further strengthened this development while simultaneously placing a stronger emphasis on AI and the rapid digitalization of traditional industries.

In his government report at the opening of the NPC session in the Great Hall of the People in Beijing, China's Premier Li Qiang spoke a lot about AI, but also about other strategies to modernize China's manufacturing industry, including further expansion of the 5G and 6G communication networks, the Internet of Things (IoT), as well as more digitalization, automation, and robotics.

In all these areas, there are new opportunities for German and European providers who offer strong products and services in the mentioned fields. The further, gradual opening of the Chinese economy to foreign investors, especially in the mentioned areas, was another "talking point" of the Chinese premier.

On the same day, China's Head of State and Party Leader Xi Jinping emphasized in a speech the new development model of the People's Republic—exploring new growth areas through more productivity with the help of modern science and technology.

Xi Jinping announced a "better integration of technology and industry," emphasizing the "need for qualitative improvement of traditional sectors" as well as the promotion of future technologies, state media in China reported.

These are good news for German machinery manufacturers in the high-tech sector, software providers in the areas of automation and process technology, or suppliers to the robotics industry, to name just a few examples. Overall, it's good news for all those who have cutting-edge industrial technology in their portfolio.

Trend 2: Domestic consumption is being promoted more strongly

The second, clearly discernible trend is the promotion of domestic consumption in China. The growth target for GDP in the current year has again been set at around five percent. At the NPC session, a slight easing of financial and fiscal policy toward government support for the economy was indicated.

Both internal issues such as the debt burden of local governments and the stabilizing crisis of the real estate market, as well as external issues like the trade and high-tech sanctions by the US government, were openly addressed at the NPC session.

However, what was evident at this year's NPC meeting, where thousands of delegates from all parts of the country and important government advisors such as Xiaomi founder Lei Jun gathered, was a "new wave of optimism," as the South China Morning Post in Hong Kong aptly noted in a commentary.

China's "Sputnik moment" with Deepseek not only caused a stir at home and fueled national pride but also ignites a new debate in the circles of foreign investment funds and strategic investors about the "investability in China."

"2025 is the year when the world of investors realizes that China has outpaced the rest of the world in competition," Deutsche Bank wrote in a report a few weeks ago. "China's 'bull market' may have just begun," Bank of America also writes in a recent report.

This new confidence in the Chinese economy is precisely the tenor of many debates in the Great Hall of the People—regardless of Donald Trump's sanctions and tariffs.

Trend 3: China remains committed to its climate policy goals

The third clear trend at this year's NPC session is not new, but its reaffirmation is all the more noticeable due to the various challenges in the domestic economy and the geopolitical tensions: China remains committed to its climate policy goals and continues to strongly focus on decarbonization, renewable energies, and all "green" industries and measures that can reduce emissions and promise more sustainability.

The "promotion of green development and transformation" is one of "ten main tasks" that Premier Li Qiang mentioned in his government report at the opening of the NPC session.

The specific, explicitly stated goals for China's "green transformation," from which concrete opportunities for German and European industrial companies can be discerned, include

• the promotion of climate-friendly, energy-saving new buildings,

• further support for the expansion of industrial clusters with green future industries,

• more recycling and circular economy, as well as

• further expansion of solar and wind energy in the People's Republic.

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*Henrik Bork is Managing Director at Asia Waypoint, a consultancy specializing in China, based in Beijing. "China Market Insider" is a joint project of Vogel Communications Group, Würzburg, and Jigong Vogel Media Advertising in Beijing.