China Acts to Cushion Tariffs Blow; In No Hurry for US Talks

Absence of stimulus bazooka reflects quiet confidence in economic recovery: Analysts

- Yew Lun Tian

China's top leaders unveiled plans on April 25 to cushion the blow of steep US tariffs, as the country braces itself for the fallout from choked trade between the world's two largest economies.

The absence of a stimulus bazooka in the plans reflected China's quiet confidence in its economic recovery, and a cautious recognition that conditions could yet worsen, warranting the preservation of policy firepower, analysts told The Straits Times.

China has shown that it is in no rush to hold trade talks with the United States or resort to drastic economy-revitalising measures just yet. Instead, it is focusing on what it has said for months it wants to do - stabilise and strengthen the fundamentals of its economy.

The Communist Party of China's Politburo, a top policymaking body chaired by President Xi Jinping, noted at its monthly meeting on April 25 that China must "stay focused on getting our own house in order", Xinhua news agency reported.

China will "use the certainty of high-quality development to counter the uncertainties of a fast-changing external environment", according to the Xinhua readout.

US President Donald Trump shook up international trade in April with his announcement of "Liberation Day" tariffs on most countries in the world, hitting China the hardest at 145 per cent.

Such a steep tariff rate has effectively created a de facto trade embargo against China, which is struggling to pivot its economy from exports to consumption.