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Chinese authorities are minimizing concerns over the potential fallout from U.S. President Donald Trump’s trade policies, asserting that they possess the necessary tools to safeguard jobs and mitigate the adverse effects of increased tariffs on exports to the United States.
During a briefing on Monday, high-ranking officials from various government sectors aimed to bolster confidence among businesses and the unemployed. They outlined measures that include enhanced lending options and other initiatives to counteract the impact of tariffs that could rise to as high as 145% on imports from China.
This briefing followed a meeting of the Politburo, where analysts noted a focus on strategies to sustain economic growth even amid declining export figures.
“Policymakers in China are on alert,” stated Louise Loo, lead economist at Oxford Economics, indicating that the recent policy announcements echo past statements.
While uncertainties linger regarding any communications between U.S. officials and Chinese President Xi Jinping, Trump claimed last week to be actively negotiating, although U.S. Treasury Secretary Scott Bessent noted that discussions have not yet commenced.
Beijing has refuted the existence of any ongoing negotiations and has responded to Trump’s tariffs by imposing import duties as high as 125% on various U.S. goods.
Officials emphasized China’s refusal to accept what they term as coercive tactics from the U.S.
“They fabricate negotiation tactics from nothing, resort to intimidation, and fail to uphold commitments, making it increasingly evident that these so-called ‘reciprocal tariffs’ contradict historical norms and economic principles, harm international trade regulations, and seriously jeopardize the legitimate rights and interests of nations,” remarked Zhao Chenxin, deputy director of the National Development and Reform Commission (NDRC), the principal economic planning body in the country.
The ongoing trade dispute between the two largest economies could potentially trigger a recession in the United States, with global ramifications. China itself faces challenges in revitalizing its growth following job losses and disruptions related to the pandemic.
Nonetheless, Chinese officials maintain confidence in the country’s ability to achieve a growth rate of approximately 5% this year, aligning with projections for 2024.
Yu Jiadong, vice minister of Human Resources and Social Security, indicated that a thorough assessment demonstrates that China’s “employment policy toolkit is more than adequate.”
The government plans to enhance support for businesses to retain employees and promote new ventures among the unemployed, Yu further noted.
China’s energy independence was also reiterated, as Zhao indicated that the country can manage without U.S. energy imports.
“Businesses scaling back or halting energy imports from the U.S. will not jeopardize our energy security,” Zhao stated.
The nation is gradually reducing its imports of American agricultural products, and Zhao asserted that ceasing these imports would not threaten food security. He explained that the primary grain imports were for animal feed and that global stock levels are sufficient to compensate for any drop in imports of corn, sorghum, soy, and oil from the U.S.
In terms of monetary policy, a deputy governor of the central bank, Zou Lan, mentioned that the People’s Bank of China is prepared to lower interest rates and ease reserve requirements to stimulate lending.
“Targeted policies will be rolled out promptly to help stabilize employment, support enterprises, and manage market expectations,” Zou emphasized.
Furthermore, China seeks to bolster domestic demand through initiatives like incentives for upgrading old vehicles, appliances, and machinery, with Zhao forecasting that equipment upgrade demand could surpass 5 trillion yuan (approximately $34.8 billion) annually.
On a broader scale, China is also encouraging the migration of rural populations into urban areas, with Zhao noting the economic benefits.
“A single percentage point increase in the urbanization rate can trigger trillions in investment demand,” he asserted. “Our nation possesses significant potential and space for expanding domestic demand.”
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AP video producer Borg Wong contributed.
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