China Balances Innovation and Consumption Amid Trade Tensions

China maintains its economic growth target at 5% and focuses on stimulating domestic consumption and innovation. Amid U.S. tariffs and internal economic vulnerabilities, Beijing plans fiscal measures including special treasury bonds and subsidies to boost consumer demand and invest in high-tech industries.

China has kept its economic growth target for 2023 unchanged at around 5%, dedicating more fiscal resources to address deflationary pressures and counter the effects of rising U.S. trade tariffs. This target was highlighted in a government document released ahead of the National People's Congress (NPC).

Premier Li Qiang is set to deliver a speech detailing China's policies for the rest of the year. The ongoing trade tensions with the U.S. threaten China's industrial sector, while subdued household demand and a struggling property market add to economic vulnerabilities.

Amidst these challenges, China plans to allocate funds for consumer subsidy schemes and high-tech investments. The government's special debt funds will support electric vehicle subsidies and recapitalize state banks, as China navigates its path between technological innovation and stimulating domestic consumption. Economic resilience is vital as China tries to balance global trade relations and internal economic priorities.

(With inputs from agencies.)