China’s Premier Li Qiang has criticized the imposition of higher tariffs on Chinese exports, stating that such measures hinder global growth. His comments come as top Chinese leaders pledged to loosen monetary policy and offer more support to the slowing economy.
Policy Shifts and Economic Stimulus Measures
Shares in Hong Kong surged after the Communist Party’s Politburo meeting revealed plans for “more active fiscal policies and moderately loose monetary policies.” This shift from the previous “prudent” approach was interpreted as a significant change aimed at cushioning the economic impacts of higher tariffs. Stephen Innes of SPI Asset Management noted that this recalibration signaled efforts to mitigate expected economic shocks.
The Chinese central bank and other regulators had already started rolling out policies to encourage spending by businesses and households. The Politburo’s statement reaffirmed a supportive policy stance, echoing a similar move made during the global financial crisis in 2008. The government has promised a “combination punch” of government spending and easier credit to boost consumption.
China’s economy has been growing more slowly than the official target, and the property market remains weak. Consumer spending is still subdued, and youth unemployment remains high. With low inflation and ample room for interest rate cuts, the government aims to address economic stagnation and improve the public’s sense of security and well-being.
During the meeting, Premier Li also met with leaders from the World Bank and other international financial organizations. While not directly naming the United States, Li criticized countries that impose high tariffs and protectionist measures, adding that such actions exacerbate global economic uncertainties and hinder growth.