China injects ‘tactical' monetary stimulus

Move taken ahead of US trade meeting

- KEVIN YAO JOE CASH

Chinese authorities announced yesterday a raft of stimulus measures, including interest rate cuts and a major liquidity injection, as Beijing steps up efforts to soften the economic damage caused by the trade war with the United States.

The announcements come shortly after US and Chinese officials said Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China's top economic official He Lifeng in Switzerland this weekend for talks.

The talks are the first opportunity for the two sides to de-escalate tensions after a protracted cat-and-mouse game over tariffs in which neither wanted to be seen as backing down. The tensions have roiled global markets and upended supply chains.

The Chinese economy is already feeling the pain from the triple-digit levies, with data last week showing factory activity contracting in April at the fastest pace in 16 months. Concerns have been rising over the impact the tariffs would have on the job market and on the already-strong deflationary pressures in China as exporters lose their biggest customer.

"The domestic economy must be strong enough before (China) kicks off any protracted trade negotiations," Xing Zhaopeng, senior China strategist at ANZ, said of yesterday's stimulus measures.