China has announced a series of stimulus measures, including interest rate cuts and liquidity injections, as economic activity slows. This action coincides with upcoming meetings between U.S. and Chinese officials to address ongoing tariff disputes. The People’s Bank of China (PBoC) initiated the first Required Reserve Ratio cut of 2025 alongside a policy rate reduction, aiming to bolster consumption and technology investment. The China Securities Regulatory Commission will also implement measures to support the nation’s share market. These measures come as reports indicated that China’s factory activity contracted sharply in April.
The timing of these measures is particularly noteworthy, as U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer are scheduled to meet with China’s top economic official, He Lifeng, in Switzerland. Analysts view these talks as a potential initial step toward resolving the trade war that has been disrupting the global economy. China’s economy has been significantly impacted by tariffs imposed since Donald Trump’s presidency. In related news, the PBoC continues its gold-buying spree, adding approximately 70,000 ounces to its reserves in April, marking six consecutive months of increased precious metal holdings.
