Premier Li Qiang signals economic support is on the way
The central government is preparing to ramp up economic support as pressure from the US-China trade war intensifies.
On Friday, Premier Li Qiang chaired a State Council executive meeting to discuss forthcoming support measures.
At the top of Li's agenda (CCTV):
- Supporting businesses to help them keep workers on payroll
- Channeling support to exporters
- Incentivizing MNCs to reinvest in China
- Boosting service-sector consumption, especially in areas like eldercare, childcare, culture, and tourism
- Stimulating private sector investment
- Maintaining stability in the stock and property markets
Li called for “stepping up counter-cyclical policy support,” but also emphasized the need to “strengthen the implementation of [existing] policy measures.”
Get smart: That indicates Beijing is preparing to ramp up existing measures – like speeding up bond issuance and pushing public funds into stock markets faster – while laying the groundwork for new measures to address emerging pressure points, particularly in trade and private investment.
Get smart: Better-than-expected Q1 economic data has given policymakers breathing room to watch how the trade war evolves before quadrupling down on policy support.
- That said, officials still need to signal they have the tools and political will to deliver fresh stimulus when needed – or better yet, offer clear directional guidance – to stabilize market expectations.
What to watch: The upcoming Politburo meeting will offer crucial insight into how top leaders are thinking about the economy.
- We expect it to convene later this week – likely on Friday – rather than at the end of the month.