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China Prepares for Economic Shocks as US Trade Dispute Escalates

Beijing's leadership directs contingency planning and policy shifts, including tariff adjustments and domestic economic support, to counter trade tensions.

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Vertreter der USA und Südkoreas vor den Verhandlungen auf einem vom südkoreanischen Finanzministerium veröffentlichten Foto

Overview

  • China's Politburo, led by Xi Jinping, has instructed government agencies to prepare for worst-case scenarios in the ongoing tariff conflict with the United States.
  • Leadership plans include implementing loose monetary policies, timely interest-rate cuts, and targeted support for firms impacted by tariffs to stabilize growth and employment.
  • Beijing has temporarily lifted surcharges on certain US-imported semiconductors, signaling a tactical adjustment while maintaining export controls on critical raw materials.
  • Efforts to boost domestic consumption focus on increasing incomes for lower- and middle-income households to drive internal demand and economic recovery.
  • The US-China trade dispute remains contentious, with both sides issuing contradictory statements about negotiations, while global markets experience continued volatility.