The President of China XI Jinping participates in the opening session of the National People's Congress (NPC) in the Great Hall of the People in Beijing, China, 5 March 2025.
Florence LO | Reuters
Beijing – China is planning to help in the fight against companies with targeted means in the face of “increased external shocks” in accordance with Reading the meeting chaired Friday by the Chinese president XI Jinping.
The meeting of the political buro, the second most powerful political body in China, appears when the tensions between Washington and Beijing increased this month with the new Tit-For-Tat tariffs of over 100%. As a result, the main banks at Wall Street reduced GDP forecasts in China for a year, while the country is still trying to achieve its haughty goal “about 5% growth in March.
The authorities called for “many funds that will help enterprises in difficulties”, such as financial support, in accordance with the reading of the Chinese language, translated by CNBC.
Political Buro also called for “timely reduction” of interest rates and the reserve requirement coefficient – the amount of cash banks must have on hand.
Zong Liang, the main researcher at Bank of China, decision makers stick to the positions of this year, while indicating flexibility for directed funds. In order to limit the impact of tariffs, China will conduct more research on specific companies and think about how to support them.
In the rare move of China in March they raised the deficit target to 4% of GDP. Minister of Finance Lan Fo'an indicated at that time China had more space to act on fiscal policy.
Since the escalation in American commercial tensions this month, local Chinese governments and main companies have announced efforts to help exporters redirect their products to the domestic market for sale.
Reading the meeting Buro Polit Buro emphasized the need to increase group income with medium and lower income and increase the consumption of services. Leaders also called for further development of technology, including the integration of artificial intelligence.
“A press release shows that the government is ready to start new policies when the economy is influenced by an external shock,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
“It looks like Beijing is not in a hurry to launch a large stimulus at this stage,” he said. “Monitoring and assessment of time and the size of commercial shock takes time.”
Coordination of politics
The CSI 300 turned short for a short time, and the Hang Seng Index HONG shrouded the profits after issuing the meeting's statement.
The Chinese political office, consisting of high -level members of the ruling Chinese communist party, tends to determine wide political directives.
The last meeting was confirmed by the policy of the State Council of the Date Executive Authority-and government ministries, “emphasizing the commitment and cooperation at high level,” said Bruce Pang, assistant professor at CUHK Business School.
“Although they cannot offer many unexpected and groundbreaking surprises, these funds equip decision makers with tools for navigating external uncertainty,” he said, adding that he expects the upcoming rights of the private sector to improve the business environment even more.
The Permanent Committee of the Chinese Parliament, the National People's Congress, is to meet from Sunday to Wednesday and review the new law supporting the private sector.
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