China is intensifying efforts to support its economy amid escalating trade tensions with the United States. The Chinese government has announced targeted measures to bolster businesses and workers affected by the trade war, aiming to mitigate the economic impact of U.S. tariffs. (China tries to stoke domestic demand as tariffs hit. It won’t be easy.)
In a recent Politburo meeting, Chinese leaders emphasized the need for proactive macroeconomic policies to counter external shocks. Key strategies include cutting interest rates, reducing the reserve requirement ratio for banks, and accelerating bond issuance to increase liquidity and stimulate economic activity. (Xi announces plan for Chinese economy to counter impact of US trade war, China Talks Up Measures to Support Economy as Tariffs Bite)
The government is also focusing on domestic consumption to drive growth. Initiatives such as expanded unemployment benefits, increased support for low and middle-income groups, and efforts to strengthen the service sector are being implemented to revitalize domestic demand. (China tries to stoke domestic demand as tariffs hit. It won’t be easy., Xi announces plan for Chinese economy to counter impact of US trade war)
Additionally, China is considering exempting certain U.S. products, including semiconductors and medical equipment, from the steep tariffs imposed during the trade dispute. This move suggests a potential easing of trade tensions, although conflicting statements from both sides indicate that negotiations remain complex. (Xi announces plan for Chinese economy to counter impact of US trade war, China grants some tariff exemptions for US imports as trade war bites)
Despite these challenges, China’s leadership remains committed to supporting domestic industries and maintaining economic stability through coordinated policy measures and strategic investments. (Xi announces plan for Chinese economy to counter impact of US trade war)