China’s finance minister said Thursday that the government has ample policy tools and flexibility to address both internal and external uncertainties, amid escalating trade tensions with the U.S.
The remarks come after Beijing imposed retaliatory tariffs on U.S. imports and its announcement earlier this week of an economic growth target of around 5% for 2025.
“Achieving the target of around 5% this year has a solid foundation, strong support, and reliable safeguards. We are fully confident in this, ” said Zheng Shanjie, head of the National Development and Reform Commission, at a press conference on the sidelines of an annual legislative meeting.
To support the struggling export sector, China will expand the coverage of export credit insurance and encourage financial institutions to extend more credit to exporters, said Commerce Minister Wang Wentao.
“China has become a major trading partner for over 150 countries. When the West is not shining, the East shines; when the North is not shining, the South shines. This further reflects the strong resilience of China’s foreign trade,” said Wang.
In its latest government work report, Beijing emphasized domestic consumption and technological innovation as key priorities amid rising trade tensions with Washington.
China’s central bank governor, Pan Gongsheng, said in the same press conference that the bank would cut interest rates and banks’ reserve requirement ratio at an appropriate time this year.
The People’s Bank of China will also offer subsidized loans to boost consumer spending, particularly in healthcare, eldercare, childcare, catering and accommodation.
To support the tech sector, Pan said the central bank would expand its technology relending quota to between 800 billion yuan to 1 trillion yuan, up from the current 500 billion yuan.
The PBOC will also work with other regulators to establish a technology board in the nation’s bond markets to spur innovation. Additionally, Pan said the bank would take steps to prevent excessive fluctuations in the yuan’s exchange rate.
Meanwhile, Finance Minister Lan Fo’an stated that local government debt risks have been “effectively” mitigated following Beijing’s debt swap program last year, which allowed localities to issue bonds to refinance high-interest-rate debt.
However, Lan cautioned that local governments must not incur new hidden debt in the future, calling it an “iron rule.”
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