China’s government plans to redirect exports to the domestic market and introduce measures to alleviate the impact of the US trade voltage.
China wants to help domestic companies with targeted measures. The reason is an increase in external shocks, stated in the report from the meeting, which last Friday was chaired by Chinese President Si Jin-Pching. TASR informs this based on the CNBC report.
The Politburo meeting, the second most powerful political body in China, took place at the time of the escalated business tension between Washington and Beijing. The largest Wall Street banks, as a result of a customs war, reduced their forecasts of the growth of the Chinese economy this year, while Beijing is still trying to achieve its growth goal of about 5 %set in March.
The government has promised to take several measures to help businesses in difficulties, including financial support. Politburo also requires that the Central Bank (PBOC) reduce interest rates and mandatory minimum reserves for banks in time.
Exporters want to go to the home market
In March, Beijing unexpectedly raised the goal of the budget deficit to 4 % of the gross domestic product (GDP). Finance Minister Lan Fo-an signaled that this would increase space for fiscal incentives. Since the escalation of the US trade voltage this month, local Chinese local governments and large companies have announced that they will help exporters to redirect their products to the domestic market.
The conclusions of the Politburo meeting emphasized the need to increase the revenue of middle and lower income groups and support the consumption of services. Chinese leaders also called for further technological development, including integration of artificial intelligence.
“This press release shows that the government is ready to introduce new policies if the economy is hit by an external shock,” said the chief and chief economist of Pinpoint Asset Management Čang. He added that Beijing seems to be not hurrying to receive extensive incentives yet, as it monitors and evaluates the effects of customs measures.
