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SCMP Reporters

This live blog has been made freely available as a public service to our readers. Please consider supporting SCMP’s journalism by subscribing. Get faster notifications on the latest updates by downloading our app.
The People’s Bank of China, the National Financial Regulatory Administration and the China Securities Regulatory Commission held a joint press conference on Wednesday to present their plan for stabilising markets and expectations.
The conference came as hopes run high for more support to be extended to exporters in doubt over their futures as US tariffs remain in the stratosphere. Aid to vulnerable private and small businesses, measures to stabilise the job market and more tools to boost domestic consumption were also expected.
Stability is also high on the government agenda as US President Donald Trump’s tariff blitz threatens to spill over to financial systems worldwide.
Reporting by Ji Siqi, Mandy Zuo, Luna Sun, Alice Li and Fan Chen.
More from our coverage:
– China urges Japan, South Korea and Asean to deepen cooperation amid trade war turbulence
– China’s offshore yuan jumps to 6-month high as rollback of ‘egregious’ tariffs seen likely
– Trump tariffs portend bleak prospects for China’s toy exporters at Canton Fair
– China’s private firms given legal recourse with new law
– Shanghai banks on mega sporting events and concerts to lift consumer spending


China’s top negotiator strikes bullish tone on economy ahead of US trade talks

China moves to bolster its economy ahead of US trade talks

China offers stimulus ahead of US trade talks

China rolls out policy package to guard against US tariffs – as it happened

China’s economic stimulus

The People’s Bank of China, National Financial Regulatory Administration and China Securities Regulatory Commission are holding a joint press conference. Photo: Xinhua

People wait to cross a road outside a shopping mall in Beijing. Expectations are high that China’s leaders will announce more measures to shore up the economy amid an intensifying trade war with the United States. Photo: AFP

Economy

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Fiscal & Monetary Policy

China’s major financial regulators announced more measures to shore up the country’s economy and capital markets as the trade war ramps up


China’s major financial regulators announced more measures to shore up the country’s economy and capital markets as the trade war ramps up.


US-China trade war

US-China relations

Banking & finance

China's economic recovery

US-China decoupling

Central banks

Donald Trump

People’s Bank of China (PBOC)

Live

The officials have yet to make an appearance in the media room, but name cards have already been laid out detailing who is due to take part in the presser. The officials are:
Pan Gongsheng, governor of the People’s Bank of China
Li Yunze, director of the National Administration of Financial Regulation
Wu Qing, chairman of the China Securities Regulatory Commission


Who will attend?

US tariff hikes have begun to take a visible toll on China’s export activity.
Weekly container bookings from China to the United States in the week of April 28 plunged 27 per cent year on year to 52,073 20-foot equivalent units (TEU), according to data from supply chain intelligence firm Vizion. This marks the sharpest weekly drop this year.
Traffic is also plummeting along trans-Pacific sea shipping routes, with China’s ports seeing an immediate drop in demand following Trump’s announcement of higher tariffs on dozens of countries in early April, per Beijing’s Ministry of Transport.
As a result, many shipping companies have been forced to make last-minute cancellations.



The trade war’s immediate effects

The officials have arrived and the briefing is about to start. As expected, the officials are:
Pan Gongsheng, governor of the People’s Bank of China
Li Yunze, director of the National Administration of Financial Regulation
Wu Qing, chairman of the China Securities Regulatory Commission



Officials arrive

US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer confirmed on Tuesday that they will travel to Switzerland to meet with Chinese economic officials later this week in Switzerland.
Speculation has been growing for weeks that both the US and China are open to a deal to de-escalate the trade war, as sky-high tariffs are already taking a toll on businesses in both countries.
But Beijing had previously denied US President Donald Trump’s claims that the two sides were already in talks, with Chinese officials calling on Washington to remove its unilateral tariffs if it was serious about doing a deal.



The state of play in the trade war

Authorities have stepped up efforts on both the monetary and fiscal fronts to shore up the economy and hit the country’s annual growth target of “around 5 per cent”.
Beijing lowered the yuan’s daily reference rate earlier last month, with the People’s Bank of China repeatedly stressing its determination to keep the currency stable amid the uncertainty of the trade war.
Pan Gongsheng, governor of the People’s Bank of China (PBOC), has also said that the bank has the capacity to cut interest rates and the reserve requirement ratio (RRR) for commercial banks to boost economic growth if needed.
On the fiscal front, China set its deficit ratio at a historic high of 4 per cent this March, an indication that government spending will be increased to offset the effects of tariff hikes.
The issuance of 1.3 trillion yuan (US$178 billion) in ultra-long-term special government bonds also began at the end of April. Designed to raise additional funding for key national projects, this year’s bond sales have occurred at an unprecedented pace.



The macro view

China’s central bank governor has announced a 0.5-point cut in the reserve requirement ratio (RRR) rate for commercial banks to provide more liquidity amid the trade war.
The bank will also cut its policy rate by 0.1 percentage points, according to Pan.


Beijing cuts RRR rate and policy rate

The People’s Bank of China will also cut the 7-day repo rate by 0.1 percentage points, according to Pan.
That is three rate cuts announced already, a sign Beijing is taking firmer action as the trade war’s impact begins to be felt across the Chinese economy.


Repo rate cut also announced

China plans to raise its funding for technological innovation by 300 billion yuan, pushing the total financing limit to 800 billion yuan.
Beijing has emphasised innovation as it tries to inject extra dynamism into its economy to shore up growth. Funding for hi-tech firms was a major component of the basket of policies announced in March.



More loans for technological innovation

Officials have announced a whole basket of new policies just now, which we will feed through gradually in the coming moments.
The first of these from China’s central bank includes lowering the mortgage rate by 0.25 percentage points and setting up a new 500 billion yuan (US$69 billion) relending tool to support service consumption and elderly care.


Blitz of extra measures announced

China’s central bank has also removed the 5 per cent reserve requirement ratio for auto financing firms, a move designed to bolster the country’s auto sales.



Easing of auto financing restrictions

On Wednesday, China’s central bank set the yuan’s central parity rate against the US dollar at 7.2005.
The Chinese currency initially fell against the dollar after US President Donald Trump announced a blitz of tariffs in early April. But it has recovered slightly in recent days as jitters grow over dollar-denominated assets.



Yuan set at just over 7.2 against the dollar

China is speeding up the establishment of a series of financing systems that are compatible with a “new real estate development model” to help support the property market, Li said.
It will further expand the scope of a pilot programme for long-term investment in insurance funds to introduce more incremental funds into the market.
Additionally, the financial regulator will adjust and optimise regulatory rules, reduce the risk factors of insurance companies’ stock investments, and support a stable and active capital market, he said.



New financing for real estate sector

China’s National Administration of Financial Regulation will introduce a package of policies as soon as possible to support the financing of small and micro companies and and private enterprises, according to Li Yunze.
It will also provide targeted services to business entities significantly affected by tariffs, he added.
Smaller businesses in the private sector are already feeling the effects of the trade war, with some reports warning that as many as 16 million jobs in China’s export sector could be at risk if the tariffs stay on.



New financing for small businesses promised

CSRC chairman Wu Qing says that Central Huijin – an investment entity directly controlled by the central government – has the strong backing of China’s central bank to stabilise the A-share market, adding that the government is trying to lure more long-term funds into the stock market
Wu says that new measures to deepen reforms of the STAR market – a bourse that focuses on hi-tech start-ups – will be introduced soon, with a focus on protecting investors.
He also says efforts will be made to boost the development of tech innovation bonds and provide comprehensive financial services for sci-tech enterprises. In addition, steps will be taken to push more medium- and long-term capital to enter the market.


Efforts to support the stock market

CSRC chairman Wu Qing says that Chinese assets are currently undervalued and that their appeal is rising. He added that he was confident about the stability of the A-share market.



China’s A-share market is ‘undervalued’

The latest reserve requirement ratio (RRR) cut will inject 1 trillion yuan of liquidity into the market, and the average RRR level will be reduced from 6.6 per cent to 6.2 per cent, according to PBOC governor Pan Gongsheng.


RRR cut will inject 1 trillion yuan into market

The measures announced today follow a series of incremental steps to shore up the Chinese economy announced by Beijing over the past few weeks and months.
At an April meeting of the Politburo, the political decision-making body vowed to roll out measures to boost vitality in capital markets. It also pledged to support companies and individuals affected by US President Donald Trump’s “reciprocal tariffs” of up to 145 per cent.
Also in April, at a State Council meeting focused on guiding market expectations, Premier Li Qiang called on officials to promote positive expectations to “form a strong synergy in society to cope with risks and challenges”.
But today’s measures indicate a new stage has begun, with Beijing moving forward with long-awaited cuts to policy rates and RRR rates for banks.



Latest in series of stability measures

Chinese markets picked up after opening on Wednesday, with the CSI 300 index rising by 1.04 per cent and the benchmark Shanghai Composite Index up by 0.84 per cent. Hong Kong’s Hang Seng Index climbed by 1.84 per cent.


The markets react

The previously announced policy interest rate cut of 0.1 percentage points will mean a drop from 1.5 per cent to 1.4 per cent.


More details on policy rate cut

Labour markets in both China and the US are likely to suffer from the tit-for-tat tariff hikes.
US tariffs on Chinese imports could put as many as 16 million jobs at risk in China, especially in the sector that manufactures goods for retail and wholesale, said analysts at the US investment bank Goldman Sachs.
Communication equipment, apparel and chemical products are “more vulnerable” than other manufactured goods thanks to their “high share in US-bound exports from China”, the analysts said.
Meanwhile, the trade war between the world’s two largest economies has threatened more than US$140 billion in American exports and thousands of jobs, according to a new report by the US-China Business Council, a Washington-based lobby group.
The “precipitous decline in US exports to China” was evidence that US businesses, farmers, ranchers and workers are “reeling from the ongoing trade war”, the council said.



Labour market under threat from trade war

Loans to white-listed real estate companies approved by commercial banks have increased to 6.7 trillion yuan, supporting the construction and delivery of more than 16 million residential units, Li says.
There are signs of stability in the property market, with new personal housing loans posting their biggest quarterly rise since 2022 in the first quarter, he added.



Positive signals on real estate

Throughout the trade war, China’s leaders have insisted that they remain confident in hitting the country’s target for gross domestic product growth this year.
Finance Minister Lan Foan reiterated that stance on Monday during a meeting of financial officials in Milan, Italy.
“China will adopt more proactive and robust macroeconomic policies and is confident in achieving the growth target of ‘around 5 per cent’ for 2025”, Lan said.
The minister also called on regional partners to strengthen macro policy coordination, deepen trade and investment ties and safeguard production and supply chain stability.


Beijing still aims to hit growth target

Pan said risk levels in the property sector and local government financing vehicles are being reduced. Depending on how effective the measures are, the scope of monetary tools could be expanded in the future to support this effort, he added.
High debt levels on the balance sheets for real estate developers and local governments have been a concern for years.



Defusing risks in property sector and local governments

When answering the Post’s question about government support for small businesses, the NFRA’s Li Yunze says that the regulator will speed up loan approvals and provide more financial support to exporters hit hard by US tariffs.



Post gets answers on support for small businesses

China is formulating policy measures to ensure that the banking and insurance industries increase their support for exporters hit by the US tariff war, Li said.
This will include ensuring that all foreign trade enterprises can access financial support, all necessary loans are approved, and that firms benefit from tailor-made services to help them transition from exporting to selling domestically, he added.


Officials working on measures to support exporters

China will consolidate Hong Kong’s role as an international financial centre and also create the conditions for foreign-listed Chinese firms to return to stock markets in the mainland and Hong Kong, CSRC chairman Wu Qing says.



Hong Kong’s role as international financial centre remains crucial

China’s clear strategic direction and increased policy predictability is making foreign investors more confident to invest in the country’s markets, Wu says.
Going forward, China will continue to make it easier for overseas institutional investors to access services, expand the scope of investments they can make, and encourage them to invest in onshore renminbi-denominated funds to diversify product offerings, he adds.
The country will also continue to open futures and options markets to qualified foreign investors and further streamline the overseas listing process.


Boosting the confidence of foreign investors

Pan says the central bank has increased the ability for listed firms to buy back shares since the US trade war hit, and he adds that financial authorities will continue to facilitate the use of this tool going forward.



More share buybacks for firms hit by US tariffs

The NAFR will help banks to set up specialized science and technology financing institutions in “an orderly manner” and encourage the exploration of a long-term science and technology loan performance evaluation system, Li says.
Insurance protection will be offered to companies working in robotics and the low-altitude economy, he adds. Meanwhile, insurance funds will be encouraged to participate in venture capital investment and carry out major equity investments in unlisted tech companies.


Banks to set up new bodies focused on sci-tech lending

The assurances from Wu Qing over the ability of Chinese firms listed overseas to return to exchanges in the mainland and Hong Kong have come amid threats of a government-enforced mass delisting in US exchanges.
A total of 286 Chinese companies were listed on the New York Stock Exchange, Nasdaq and NYSE American with a combined market capitalisation of US$1.1 trillion at the end of March, according to data from these exchanges.
Officials in Washington have yet to rule out the possibility, and some US legislators have put the matter to the Securities and Exchange Commission.



Is China preparing to bring its overseas listed firms home?

Wu says that an action plan to promote the high-quality development of mutual funds will be released today.
He references Warren Buffett’s farewell address, noting that China’s reform aims to embrace Buffett’s core investment philosophies, including value investing and long-term investing.
He adds that the current era calls for a new generation of entrepreneurs and investors to rise to the occasion.


New action plan for mutual funds incoming

The CSRC will guide fund companies to shift their focus from scale to returns, and align their interests with those of investors, Wu says.
He also vows to improve the stability of investment behavior, conduct long-term assessments, reduce the tendency to chase rising and falling prices, and improve long-term returns.



Funds encouraged to focus on returns, not scale

And that is it for the presser. The officials have left the media room, and we will publish a few more updates with reaction and our rundown of the key takeaways soon.


The briefing comes to a close


Ahead of anticipated US trade talks, the People’s Bank of China lowered the reserve requirement ratio (RRR) for commercial banks by 0.5 percentage points, injecting 1 trillion yuan (US$138 billion) of liquidity into the market.


It also announced a 0.1-percentage-point cut to the policy rate, and a cut to relending facilities by 0.25 percentage points.


Officials also announced measures to boost domestic consumption and tech innovation. This included lowering the mortgage rate by 0.25 percentage points, scrapping the RRR rate for auto financing companies, providing extra funding for technological innovation, and creating a 500 billion yuan relending tool for service consumption and elderly care.


China also plans to “create the conditions” for its foreign-listed firms to return to domestic stock markets, and supports them in doing so. This follows repeated statements by US officials regarding the possibility that Chinese companies could be delisted from American exchanges.


Beijing will ensure that the banking and insurance industries increase their support for exporters hit by the US tariff war by providing broader access to financing, faster loan approvals and tailored services to help firms pivot to the domestic market.


Central Huijin – an investment entity directly controlled by the central government – has the strong backing of China’s central bank to stabilise the A-share market, and the CSRC said it is focused on attracting more long-term funds into the stock market.


Hong Kong’s role as an international financial centre remains crucial.

