China announces series of trade stimulus policies

Chinese officials have pledged financial support for businesses and a stable currency to counter potential challenges from Donald Trump's presidency.

On November 21, China's Ministry of Commerce announced a series of policies to boost foreign trade. Accordingly, the country will encourage financial institutions to provide more products to support businesses in managing foreign exchange risks. Authorities will also strengthen macroeconomic policy regulation to keep the yuan "relatively stable".

China will also increase agricultural exports and support imports of energy and core equipment. "We will guide and support companies to proactively respond to unreasonable trade barriers from other countries and create a favorable external environment for exports," the statement said.

Containers at Lianyungang (Jiangsu, China). Photo: Reuters

President-elect Donald Trump has vowed to impose a 60% import tariff on all goods from China, causing concern among manufacturers in the country to move factories to Southeast Asia and other locations. Many exporters in the world’s second largest economy have been preparing for a disruption in trade.

A recent Reuters poll of economists found that the United States could impose tariffs of nearly 40% on Chinese imports as early as next year, which could shave up to 1% off the world’s second-largest economy’s GDP growth.
China will support the deployment of personnel from its major trading partners, a policy agreed earlier this month at a meeting chaired by Premier Li Qiang.

China has recently been actively improving its relations with the European Union (EU), India, Australia, African and Latin American countries. "China's exports have shifted in the past few years. Last year, the US market accounted for only 15% of the country's total exports, compared to an average of 18% in the previous decade," said Francoise Huang, Asia-Pacific economist at Allianz Trade.