China Aims for Economic Stability Amid Tariff Tensions

China plans to increase its budget deficit, issue more debt, and adjust monetary policy to ensure stable economic growth amid rising trade tensions with the U.S., following Donald Trump's return to the presidency. These measures were outlined in the Central Economic Work Conference's recent meeting.

China is set to increase its budget deficit, issue more debt, and adjust monetary policy to safeguard stable economic growth as it braces for escalating trade tensions with the United States. China's leadership convened on Dec. 11-12 for the Central Economic Work Conference, outlining these measures as President Donald Trump makes his way back to the White House.

In response, national broadcaster CCTV reported that the external environment changes have deepened. Currently, China's economy is grappling with a property market crisis, high local government debt, and weakening domestic demand. The country's exports, once a rare strength, are now threatened by potential increases in U.S. tariffs.

CEWC's actions align with the Politburo's recent strategy, advocating an "appropriately loose" monetary policy and "more proactive" fiscal levers. The conference also highlighted forthcoming higher budget deficits and increased debt issuance at different government levels, as officials aim to counteract the impact of external pressures.

(With inputs from agencies.)