China Targets 5% GDP Growth, Increases Deficit to 4% to Fund Stimulus Amid U.S. Tariff Risks

Chinese leaders plan to raise the budget deficit to 4% of GDP in 2024, the highest on record while maintaining an economic growth target of around 5%, Reuters reported. The revised deficit is up from a 3% target, reflecting a "more proactive" fiscal stance. The additional spending will be funded through off-budget special bonds, sources added. Analysts anticipate ma odest expansion of off-budget bond quotas. China’s second-largest economy faces headwinds from a property crisis, weak demand, and potential U.S. tariffs exceeding 60% when Donald Trump returns to office. The government is also expected to shift to a looser monetary policy, with analysts forecasting interest rate cuts and liquidity boosts to cushion economic pressures.