China launches measures to stabilize economy

The Chinese government on Monday unveiled several measures aimed at stabilising employment, the economy and foreign trade, in the face of the trade war with the United States, which has increased uncertainty in the world's second-largest economy. Chinese authorities have "full confidence" in achieving the economic growth target for 2025.

Zhao Chenxin, deputy director of the National Development and Reform Commission, the country's top planning body, explained that the measures aimed at stabilizing China's foreign trade, which has been shaken by the trade war initiated by US President Donald Trump, involve "specific and differentiated support for each sector".

The Chinese government “will help exporting companies avoid risks,” Zhao said, adding that Chinese service companies will be encouraged “to expand internationally.”

Foreign companies will also be encouraged to “reinvest” in China , the official noted, as quoted by China's official Xinhua news agency.

Regarding support for consumers, the minister mentioned “the reinforcement of support for elderly people with disabilities”, “the expansion of consumption in the automobile sector” and “the construction of a salary distribution system suited to the skills of each worker”.

Zhao also stressed the importance of “continuously stabilizing and revitalizing the capital market,” “increasing financial support for the real economy” and “consolidating the stability of the real estate market,” which has been in a deep crisis for years.

Regarding the stabilization of employment, the deputy director announced “an increase in professional training” and “a reinforcement of public employment services”.

On Friday, the Chinese Communist Party (CCP) leadership also called for measures to stabilize and stimulate the economy, in order to mitigate the effects of the trade war with the United States.

After a meeting, the CPC Politburo declared that, in the face of the “growing impact of external shocks”, the Chinese government “will coordinate efforts to address the domestic economy in parallel with the challenges of international trade”.

The powerful political body was referring, without specifically mentioning, to trade disputes with the United States in recent weeks, which have resulted in the mutual imposition of tariffs exceeding 100%.

The Politburo indicated that “it is necessary to further consolidate the foundation for China’s sustained economic recovery”, citing the importance of developing service consumption and “strengthening the role of consumption as a driver of economic growth”.

Since the start of the trade war triggered by Trump, Chinese companies have turned their attention to the domestic market.

However, doubts still remain about the viability of this strategy, due to weak domestic demand in China, one of the main signs affecting the world's second largest economy.

In recent years, Beijing has refused to implement strong stimulus measures to avoid the inflation that hit Western economies after the pandemic, citing high public debt and Chinese President Xi Jinping's opposition to subsidies.

Beijing said, however, that it would implement an interest rate cut “at the right time”.

Chinese authorities also said they have “full confidence” in achieving their economic growth target for 2025, “around 5%”, despite the trade war between China and the United States.

Zhao, deputy director of the National Development and Reform Commission, said the Asian power has “abundant policy instruments” and “political room for maneuver” to achieve its goals, according to a statement from China’s official Xinhua news agency.

“Regardless of changes in the international situation, we will maintain our development goals, our strategic focus and concentrate on doing our job well,” the official said.

The NDRC deputy director said Chinese authorities “will pay more attention to improving the efficiency and effectiveness of policy implementation to ensure that policies reach businesses and the general public.”

Zhao added that there will be “efforts” to “promote the implementation of special actions to boost consumption” and to “accelerate the creation of a national fund for venture capital”.

The Deputy Director said that most policies will be implemented in the second quarter and that the authorities will continue to prepare contingency plans and improve the toolbox of policy instruments at their disposal.

In March, China set its target for economic growth in 2025 at “around 5%” , for the third year in a row, after having grown by 5% in 2024.

However, some international organizations have been skeptical about the Asian country's ability to achieve the 2025 target, given the trade disputes between Beijing and Washington.

The International Monetary Fund last week cut its economic growth forecast for China in 2025 by 0.6 percentage points to 4%, mainly due to tariff tensions, which cut the “positive momentum” of the last quarter of 2024.