{"id":14192,"date":"2025-04-27T04:22:33","date_gmt":"2025-04-27T04:22:33","guid":{"rendered":"https:\/\/finderica.com\/?p=14192"},"modified":"2025-04-27T04:22:33","modified_gmt":"2025-04-27T04:22:33","slug":"china-pledges-to-ramp-up-targeted-support-for-businesses-as-u-s-trade-war-hits","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=14192","title":{"rendered":"China pledges to ramp up targeted support for businesses as U.S. trade war hits"},"content":{"rendered":"
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Chinese President Xi Jinping attends the opening session of the National People’s Congress (NPC) at the Great Hall of the People in Beijing, China, March 5, 2025.<\/p>\n

Florence Lo | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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BEIJING \u2014 China plans to help struggling businesses with targeted measures in the face of “increased external shocks,” according to a readout of a meeting<\/a> chaired Friday by President Xi Jinping.<\/p>\n

The meeting of the Politburo, the second most powerful political body in China, comes as tensions between Washington and Beijing have escalated this month with new tit-for-tat tariffs of more than 100%. Major Wall Street banks have cut their China GDP forecasts for the year as a result, while the country still strives to achieve its lofty goal of “around 5%” growth set in March.<\/p>\n

Authorities called for “multiple measures to help businesses in difficulty,” such as financial support, according to the Chinese-language readout, translated by CNBC.<\/p>\n

The Politburo also called for “timely reduction\u201d of interest rates and the reserve requirement ratio \u2014 the amount of cash banks need to have on hand.<\/p>\n

Policymakers are sticking with their stance from earlier this year, while indicating flexibility for targeted measures, said Zong Liang, chief researcher at Bank of China. For mitigating the impact of tariffs, he expects China will do more research on specific businesses, and consider how to support them.<\/p>\n<\/div>\n

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In a rare move, China in March raised its deficit target to 4% of GDP. Finance Minister Lan Fo’an indicated at the time that China had more room to act on fiscal policy.<\/p>\n

Since the escalation in U.S. trade tensions this month, local Chinese governments and major businesses have announced efforts to help exporters redirect their products to the domestic market for sale.<\/p>\n

The Politburo meeting readout emphasized the need to increase the income of middle and lower-income groups, and boost services consumption. The leaders also called for further tech development, including the integration of artificial intelligence.<\/p>\n

“The press release shows the government is ready to launch new policies when the economy is affected by the external shock,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.<\/p>\n

“It seems Beijing is not in a rush to launch a large stimulus at this stage,” he said. “It takes time to monitor and evaluate the timing and the size of the trade shock.”<\/p>\n<\/div>\n

<\/a>Policy coordination<\/h2>\n
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The CSI 300 briefly turned lower and Hong Kong’s Hang Seng Index trimmed gains after the meeting statement was released.<\/p>\n

China’s Politburo, composed of high-level members of the ruling Chinese Communist Party, tends to lay out broad policy directives.<\/p>\n

The latest meeting reaffirmed policies from the State Council \u2014 the top executive body \u2014 and government ministries, “underscoring high-level commitment and collaboration,” said Bruce Pang, adjunct associate professor at CUHK Business School.<\/p>\n

“While they may not offer many unexpected and ground breaking surprises, these measures equip policymakers with tools to navigate external uncertainties,” he said, adding he expects a forthcoming private sector law to further improve the business environment.<\/p>\n

The standing committee of China’s parliament, the National People’s Congress, is scheduled to meet from Sunday to Wednesday, and review a new law to support the private sector.<\/p>\n<\/div>\n

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