Beijing has announced it will roll out a suite of measures designed to protect workers from the impact of US President Donald Trump’s trade war with China, multiple media outlets report. It has stopped short of announcing any fresh stimulus measures, however.
At a briefing on Monday, senior officials from numerous government departments vowed to expand vocational training schemes, boost employment through the likes of public works programmes, and encourage companies to maintain stable hiring. This was in response to the millions of export-related jobs believed to be at stake in the mainland due to the steep and sweeping “reciprocal tariffs” the US is applying to most Chinese imports.
Zhao Chenxin, deputy head of the National Development and Reform Commission, said the central government remained “fully confident” the country’s 5 percent annual growth target would still be met, despite headwinds.
[See more: China’s Canton Fair sets a new record for overseas buyers, despite US tariffs]
“We still have ample policy reserves and plenty of policy space,” he said. “No matter how the international situation evolves, we will stay focused on our development goals … and concentrate on managing our own affairs well.”
Zou Lan, deputy governor of the People’s Bank of China, noted that more cash would be freed up for banks and said interest rates would be reduced at an appropriate time.
Regarding the central government’s call to hold off on additional stimulus measures, Larry Hu, chief China economist at the Australian investment banking firm Macquarie told Reuters it was “simply too early” for Beijing to go all-in. “It’s much easier for Trump to walk back his tariff threat than it is for Beijing to walk back its stimulus announcement. Moreover, policymakers could announce new stimulus at any time.”
[See more: How currency swings are going to be affecting summer vacations]
Ting Lu, chief China economist at the Japanese investment bank Nomura, told Reuters that announcing a new raft of stimulus now would be akin to Beijing “blinking first in the game of chicken by showing nervousness and chaos.”
While Trump has purported that Washington and Beijing are already in trade talks (and US Treasury Secretary Scott Bessent has described the high tariff rates between the two countries as unsustainable), Beijing has denied negotiations were taking place. As it stands, China is enforcing a 125 percent tariff rate on all US imports, while the US is charging duties of up to 145 percent on most Chinese imports.
At Monday’s briefing, Zhao described the US as a bully that “makes up bargaining chips out of thin air” and goes back on its word. He added that Trump’s so-called “reciprocal tariffs” ran counter to “historical trends and economic laws, impacting international trade rules and order.”
