China Vows to Aid Exporters, Denies Being in Trade Talks With US
Chinese officials vowed to provide more support for exporters affected by US President Donald Trump’s tariffs, showing greater urgency to shore up the crucial sector while denying having had any trade talks with Washington.
Policymakers in Beijing on Monday laid out policies to aid exporting companies, including plans to ensure troubled firms get the loans they need and boost domestic consumption to absorb the blow of US levies. Hours later, the Chinese Foreign Ministry again denied the world’s two largest economies were discussing tariffs.
The separate briefings signal Beijing is in no rush to aggressively expand economic stimulus or jump into negotiations with the US, even as prohibitive levels of tariffs are forecast to halt bilateral trade and hurt a sector that contributed to nearly a third of the economy’s growth last year.
“As far as I know there have not been any calls between the two presidents recently,” Foreign Ministry spokesman Guo Jiakun said in response to a question about Trump telling Time Magazine he had had a conversation with Chinese President Xi Jinping. “Let me make it clear one more time – China and the US are not engaged in any consultation or negotiation on tariffs.”
The denial came after policymakers professed full confidence in reaching the economy’s expansion target of around 5% this year while announcing targeted steps to support exporters. They largely repeated vows last week by the decision-making Politburo, led by Xi, to prepare for external shocks.
“Since the beginning of this year, the risks and challenges faced by China’s foreign trade development have increased significantly, especially the unilateral tariffs imposed by the US,” said Sheng Qiuping, vice minister of commerce. “In order to help foreign trade enterprises actively respond to external risks and challenges, we will adhere to a goal-oriented and problem-oriented approach.”
Officials announced measures including:
Guidance for lenders to maintain loans to small and medium-sized trade firms
Special credit tool to support the export of large equipment
Assistance to firms to diversify markets
Reducing costs for domestic trade, such as rent and streaming fees
Optimizing the exchange rate hedging tool for trade firms
China’s benchmark CSI 300 Index of onshore stocks erased losses as the economic briefing went on. The yield on 10-year government bonds was little changed, while the yuan weakened a tad along with most regional peers as the dollar gained.
“Both the timing, the size and approach of growth supportive measure will be flexible, pending the next move of the US,” said Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group, adding that Beijing has a track record of offering exporters-specific support during the pandemic and the global financial crisis.
In an early sign of trouble for exporters, cargo shipments have plummeted since the US raised levies on China to 145% early this month, perhaps by as much as 60%, according to one estimate.
There are currently about 40 cargo ships that recently stopped at ports in China and are now bound for the US, down by about 40% from early April, according to ship tracking compiled by Bloomberg.
Source : Bloomberg
