China said its policy tools are at the ready in response to last week’s “reciprocal tariff” blitz from Washington, a show of confidence as the country tries to shore up market and investor sentiment.
While the Communist Party’s official newspaper struck a self-assured tone in a commentary piece Sunday evening, investment banks such as Morgan Stanley and UBS have predicted announcements of rate cuts from China’s central bank and heightened fiscal spending are unlikely to be far off.
“The party had already anticipated this new round of American economic suppression, has thoroughly assessed its potential impacts and prepared contingency plans with sufficient buffers and policy flexibility,” wrote People’s Daily.
“Going forward, monetary policy tools such as reserve requirement ratio cuts and interest rate reductions can be deployed at any time as needed.”
The newspaper said China’s “mega-sized economy” can withstand the pressure.
Policies supporting consumption, the stock market and the sectors hit hardest by the US tariff hikes will be announced in the future, People’s Daily said.
