China has set an ambitious GDP growth target of around 5% for 2025, amidst rising trade tensions with the United States. Premier Li Qiang announced the target during a session at the Great Hall of the People in Beijing, underpinning it with a commitment to bolster domestic demand as the primary driver of economic growth. The announcement was part of the National People's Congress, marking a pivotal moment for China's economic policy amid an increasingly complex global landscape.

The backdrop to China's growth ambition is a strained economic environment characterized by stuttering employment rates, particularly among the youth, sluggish consumer demand, and an ongoing crisis in the property sector. In response to these challenges, China plans to create 12 million new urban jobs and has set an inflation target of 2% for the year. This internal focus comes as part of a strategic pivot, signaling a reduced reliance on exports amid declining international demand.

The trade conflict with the United States has intensified with President Donald Trump imposing increased tariffs on Chinese goods, thereby sparking retaliatory measures from Beijing. China has countered with tariffs ranging from 10% to 15% on key US agricultural imports like soybeans, pork, and wheat. While these measures are less severe than expected, analysts warn of a potentially stronger response should the trade tensions escalate further.

On the fiscal front, Premier Li announced an unprecedented increase in China's budget deficit to 4% of GDP, a move aimed at providing the government more flexibility to maneuver through economic slowdowns. This is accompanied by significant defense spending, which is set to rise by 7.2% as the nation modernizes its military capabilities in light of regional disputes and strategic competition with the US. This growth in defense budget reflects Beijing's broader agenda to assert its geopolitical stance while managing internal economic stability.

Beijing's domestic policies highlight a drive to not only bolster economic resilience but also to enhance technological development and industrial modernization. Initiatives to support technological advancements, especially in AI and renewable energy sectors, showcase China's ambitions to lead globally in innovative sectors. However, the tension between maintaining industrial growth and addressing domestic consumption challenges persists as a key issue for the Chinese administration.

The ongoing economic reforms and geopolitical strategies are set against a demographic backdrop where China is grappling with a rapidly aging population. This demographic shift imposes additional economic pressures, as the government explores measures such as extending retirement ages and increasing social service supports to sustain economic momentum.

China's approach reflects a nuanced balancing act between responding to external pressures and nurturing domestic growth engines. As the US-China trade conflict unfolds, Beijing's economic maneuvers are closely watched by global markets, investors, and political analysts, who are keen to understand how these strategies might reshape global economic and political alignments in the coming years.