Beijing outlines targeted support to counter US tariffs

On Friday, China’s leaders promised increased support for companies suffering from a worsening trade war with the United States.

According to an official summary, the pledge came in a Politburo meeting led by President Xi Jinping. The 24-member body said businesses facing “increased external shocks” would receive multiple forms of support, including easier credit and faster tax rebates.

The assurance follows Washington and Beijing’s new tariffs of more than 100% this month, a move that has pushed several Wall Street banks to lower their forecasts for China’s 2025 growth. Beijing is still chasing the “around 5%” target it set in March.

The Chinese readout reported by CNBC said the People’s Bank of China should cut interest rates and the reserve requirement ratio for lenders when needed.

Zong Liang, the Bank of China’s chief researcher, said policymakers are maintaining the stance set earlier this year while showing room for targeted moves. He expects officials to study which exporters suffer most from tariffs.

Beijing signaled targeted policy support

Beijing already expanded its deficit target to 4% of gross domestic product in March. Finance Minister Lan Fo’an then said spending could be increased.

Since the latest tariff escalation, provincial governments and large firms have begun steering export goods toward the domestic market.

The Politburo urged broader efforts to lift the earnings of middle and lower-income households and spur spending on services while pressing ahead with artificial intelligence projects.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote that the press release shows the government is ready to launch new policies while the economy is affected by the external shock.

“It seems Beijing is not in a rush to launch a large stimulus at this stage,” he said.

Asian markets reacted modestly

The CSI 300 index briefly dipped, and Hong Kong’s Hang Seng trimmed gains soon after the statement appeared.

Friday’s statement echoed directions already issued by the State Council and ministries, said Bruce Pang, adjunct associate professor at CUHK Business School, adding that an upcoming law aimed at the private sector should improve the climate for entrepreneurs.

China’s parliament, the National People’s Congress Standing Committee, meets from Sunday through Wednesday and is due to review that draft legislation.

Businesses will watch for concrete measures behind Friday’s promises, even as the tariff standoff shows no sign of easing. Observers do not expect a breakthrough in talks any time soon.

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