Outlook for the Two Sessions: reform measures can be felt and implemented to help enterprises benefit the people

2025-03-03

During the eight-day Spring Festival holiday marking the Year of the Snake (Yisi), China’s trade-in program for automobiles, home appliances, furniture, and digital products such as smartphones saw robust sales: 8.6 million units sold, generating over 31 billion yuan in revenue.

From subsidies for trade-in initiatives to "patient capital" from venture capital funds, from lowering mortgage interest rates to accelerating the launch of major projects, and from pre-releasing hundreds of billions in investment plans to debt resolution schemes alleviating local government pressures, a series of policy measures propelled China’s economy to a 5% growth rate by year-end, with GDP exceeding 130 trillion yuan. As the 2025 National Two Sessions approach, expectations are high for more tangible reforms to stabilize economic growth.

Bold Macroeconomic Policies

In response to internal cyclical fluctuations and external uncertainties, China is planning more proactive macroeconomic strategies. Recent remarks by the People’s Bank of China governor and the Minister of Finance 重申 the need for "counter-cyclical adjustments."

Fiscal Stimulus Expansion: Higher deficit-to-GDP ratios, increased issuance of ultra-long-term special treasury bonds, expanded use of local government special-purpose bonds, and enhanced intergovernmental transfers are expected to be detailed during the Two Sessions.
Prudent Monetary Easing: Efforts to 疏通 policy rate transmission channels and optimize structural monetary tools may signal new directions. The scale, timing, and impact of interest rate cuts and reserve requirement ratio reductions will likely dominate discussions among deputies and advisors.

Supporting Enterprises and People

Macro policies aim to translate into "confidence codes" for micro-entities—households and businesses. The Two Sessions are expected to introduce measures to:

Strengthen Livelihood 保障: Address healthcare, education, fertility, and elderly care while prioritizing employment. With an estimated 12.22 million college graduates in 2025, proposals to boost flexible employment protections and sustain job 帮扶 in formerly impoverished areas are anticipated.
Empower Private Enterprises: Following a high-level symposium on private enterprises, initiatives to improve the business environment, standardize law enforcement, and reduce burdens will be key.

Cultivating Emerging Industries

Amid the Fourth Industrial Revolution, China is leveraging technological innovation to drive new-quality productivity and modernize industrial systems. Highlights include:

AI Breakthroughs: The popularity of the DeepSeek large model has drawn global attention to China’s AI capabilities.
Low-Altitude Economy: A trillion-yuan "blue ocean" identified in local Two Sessions, poised for rapid growth.
EV Leadership: China’s passenger EV sales accounted for 93% of global incremental growth in 2024.

The upcoming sessions will likely focus on nurturing emerging industries, including digital economy roadmaps and policies to support startups.

Restoring Market Confidence

Policy adjustments, such as eased property purchase restrictions and lower mortgage rates, have revitalized China’s real estate and stock markets:

Housing Recovery: January 2025 saw a 151.9 billion yuan year-on-year increase in new personal housing loans, totaling 244.7 billion yuan.
Equity Market Optimism: Foreign investors have expressed confidence in A-shares, particularly tech sectors.

Future policies may emphasize:

Affordable Housing: Expanding allocation-based 保障房 while improving quality.
Capital Market Reforms: Advancing public fund reforms and optimizing stock repurchase and lending mechanisms.

Edit:Yao jue Responsible editor:Xie Tunan

Source:CNS.cn

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