BANGKOK (AP) Premier Li Qiang sneered at warnings of greater tariffs on Chinese exports, claiming they impede global progress, while China’s top authorities promised to relax monetary policy and offer more assistance for the faltering economy.
Following the release of a report by state media on the meeting of the Politburo of the ruling Communist Party, which stated that leaders would adopt more aggressive fiscal policies and moderately loose monetary policies, Hong Kong shares surged on Monday.
Market participants viewed the move away from the cautious monetary policies of the previous 14 years and toward a more relaxed stance as a major change, which sparked a wave of purchases that caused the Hang Seng index to rise 2.8%.
Stephen Innes of SPI Asset Management stated in a remark that this is a major reorientation in their strategy, which aims to mitigate the expected economic shocks (from increased tariffs).
The Chinese central bank and other officials started implementing a number of measures a few months ago with the goal of enticing people and companies to increase their spending. All things considered, Monday’s statement largely restated the same general pledges.
According to a report by Julian Evans-Pritchard, the readout makes it clear that the change to a more supportive policy posture that started in September is still going strong. The last such change occurred in late 2008, amid the global financial crisis, he said, and in the upcoming year, there might be more rapid interest rate reductions.
The annual economic planning meeting later this week, which will reaffirm policy for the upcoming year, has been set in motion by Monday’s meeting.
The property market is still in the doldrums, and China’s economy has grown a little more slowly than the official goal of a 5% annual expansion this year. The statement from the Politburo meeting promised a combined punch of government spending and cheaper credit to assist boost consumption, which has not fully recovered from the COVID-19 pandemic.
The government said Monday that consumer inflation in November was less than anticipated at 0.2%, down from 0.3% in the previous month, mostly as a result of decreased food costs. According to economists, that gives plenty of leeway for interest rate reductions.
The statement called for increasing people’s sense of gain, pleasure, and security because youth unemployment is still relatively high and many households are struggling due to decreasing property prices and precarious jobs.
It stated that in order to guarantee the stability of the general socioeconomic condition, we must do a good job of protecting people’s livelihoods and ensuring their security and stability.
Li, who traditionally oversees the economy as premier, met with the leaders of the World Bank and other major international financial institutions on Monday as well.
In a subtle jab at Washington at a time when the U.S. has been tightening control on exports of advanced technology and President-elect Donald Trump is threatening to drastically increase import duties on Chinese goods, Li targeted nations that impose trade restrictions through higher tariffs and other measures, without specifically mentioning the United States.
Some nations now readily impose additional high tariffs, creating barriers of protection, as a result of economic globalization. Li stated that trade restrictions are becoming more and more stringent.
He continued, “The reason I’m talking about this issue is because it has further increased uncertainties and caused huge interference to the operation of the global economy against the backdrop of weak economic growth of the world.”
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