Not yet at the table, but economic plan B is already underway. ¥1 trillion in cash released, interest rates lowered – all as a ‘signal’ that China will not bow to Washington.
On Wednesday, Beijing announced a range of economic stimulus measures including interest rate cuts and easing bank reserve requirements just days before crucial talks with the US scheduled to take place in Geneva.
China’s central bank governor, Pan Gongsheng, announced that the reverse repo rate was lowered to 1.4% while lending rates to banks were reduced by 0.25 percentage points.
Banks’ reserve requirement ratios were also cut by 0.5%, freeing up around ¥1 trillion (RM650 billion) for new lending.
A haphazard strategy? Not at all!
Despite this move, China has shown itself prepared to wage economic warfare ahead of a meeting between US Trade Representative Jamieson Greer, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng if a deal cannot be reached.
Foreign Ministry spokesman Lin Jian stressed that any form of pressure on China will not work, and that China will continue to defend its legitimate interests and uphold international justice.
Analysts expect the talks to be a difficult and lengthy process to reach a resolution, but China's move to ease its monetary policy is seen as an early effort to provide a 'buffer' ahead of what are expected to be challenging negotiations.
