China has ‘ample’ policy tools to face economic challenges amid Trump’s trade war, say top officials
Chinese Finance Minister Lan Fo’an hinted that further stimulus measures could be on the cards, after the government set the 2025 fiscal deficit target at 4 per cent of the GDP.
Delegates leaving after the opening session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, China, on Mar 5, 2025. (Photo: CNA/Chushi Hu)
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BEIJING: China’s top finance and economic officials said on Thursday (Mar 6) that the country has ample space in its policy arsenal to tackle the challenges of a mounting trade war with the United States and a sluggish local economy.
They were speaking at a press conference as part of the annual Two Sessions, China's most important political meetings of the year.
It comes as the US levied an additional 10 per cent duty on China, resulting in a cumulative 20 per cent tariff. The newer tariffs took effect on Tuesday.
Chinese Commerce Minister Wang Wentao warned that there would be no winners in a trade war.
TRUMP THREATS
Wang, in response to a question from CNA about China’s strategy in navigating uncertainties arising from US President Donald Trump's tariffs, said: “He who disrespects others should be treated in the same way he treats others. Coercion and extortion are not working on China. They cannot intimidate China either.
“China is firm in its resolve to safeguard its own interests,” he added.
“As for the unilateral tariffs imposed by the US side, we have already taken necessary response measures in accordance with basic principles governing international law and the relevant laws and regulations.
“If the US side goes further down this wrong path, we will continue to respond in kind.”
CHINA’S ECONOMIC POLICIES
Chinese Finance Minister Lan Fo’an noted that the central government has left ample room for policy tools to be implemented in the coming year.
He hinted that further stimulus measures could be on the cards, after the government set the 2025 fiscal deficit target at 4 per cent of the country’s gross domestic product (GDP).
“On the one hand, more effort is needed in carrying out the existing policies. We need to implement well the policy package put forward in the fourth quarter last year and make sure of the sustained effect of this policy in 2025,” said Lan.
“On the other hand, more concrete, incremental policy should be designed. We need to make full use of the policy space.”
China has pledged to step up support for the local economy.
On Wednesday, Chinese Premier Li Qiang, detailed China's economic policies for the rest of the year, unveiling that the world's second-largest economy will keep this year’s GDP target at around 5 per cent - a goal that some analysts describe as challenging.
“Currently, our forecast is at about 4.2 per cent and part of the reason is because previously we have seen China really pull out a lot of stops in order to hit the 5 per cent growth target in both 2023 and 2024. So they are working off a higher base,” said Heron Lim, an economist at Moody’s Analytics.
“So in order to grow another 5 per cent off two straight years of growing about 5 per cent each, I think that is in itself a challenge.”
