Chinese authorities will step up support for businesses, consumers, and workers affected by US import tariffs.
At a meeting on April 25, the Politburo - the country's top policymaking body - reaffirmed plans to increase bond issuance, ease monetary policy, and help workers keep their jobs. The efforts are aimed at maintaining domestic stability as U.S.-China trade tensions are likely to drag on.
"The foundation for China's sustainable economic recovery needs to be further consolidated, as external shocks are intensifying. Our goal is to stabilize employment, enterprises, and markets and respond to rapid changes in the external environment with high-quality development," Xinhua quoted a statement after the meeting as saying.
People on a pedestrian street in Shanghai in September 2023. Photo: ReutersChinese authorities also urged preparations for "worst-case scenarios" by making adequate plans and carrying out economic tasks well. The country will increase the rate of unemployment insurance fund repayments for companies heavily affected by import tariffs, in order to stabilize employment.
"More measures need to be taken to support struggling enterprises. We will strengthen financial support and encourage export enterprises to shift to domestic sales," Xinhua reported.
China will pursue a more proactive fiscal policy and a moderately loose monetary policy, by accelerating the issuance of government bonds and cutting the reserve requirement ratio (RRR) for banks, or lowering the reference interest rate at an appropriate time.
To boost the role of domestic consumption in economic growth, Beijing will also work to increase incomes for low- and middle-income groups and develop consumption in the service sector. Restrictive policies in the consumption sector will be lifted soon.
In addition, the country has also stepped up measures to stabilize the real estate market, including renovating degraded urban housing and adjusting policies on handling commercial housing inventory.
In the first quarter, China's GDP grew 5.4%, exceeding analysts' forecasts. However, the market is concerned that China's growth will slow down rapidly from the second quarter, as import tariffs on the US are currently up to 145%.
This week, both US President Donald Trump and Treasury Secretary Scott Bessent expressed optimism that trade tensions between the two countries will ease and tariffs will be reduced. Meanwhile, Beijing continues to call on the US to remove tariffs to give the two countries a chance to negotiate.
(according to Reuters, Xinhua)