China pledges stimulus in new year, targets U.S. chipmaker

BEIJING — Leaders of the world’s second-largest economy pledged on Monday to adopt a looser monetary policy, along with taking proactive steps to spur growth in the face of likely increased pressure from tariffs and continued soft domestic consumption.

The ruling party’s Politburo released a readout of a meeting where it called for “implementing a more proactive fiscal policy and a moderately loose monetary policy” heading into 2025.

The meeting announced supply-side reforms focused on upgrading manufacturing capabilities “driven by scientific and technological innovation, and developing a modernized industrial system.”

Given the near-certainty of increased tariffs from the United States levied by the incoming Trump administration, policymakers said they would continue to take steps to address these downsides. “The country (will) expand opening-up and stabilize foreign trade and investment, as well as effectively prevent and defuse risks in key sectors,” a readout of the meeting said.

China’s economy has faced considerable headwinds this year, with weak domestic consumption and a slumping housing market creating considerable demand-side pressures, along with tariffs — originally enacted by Trump but continued in large part under the Biden administration — hitting domestic manufacturing.

In September, the country’s central bank took aggressive monetary easing steps to address these pressures, slashing interest rates and injecting US$140 billion (9 trillion yuan) into its financial system.

Also on Monday, China took retaliatory steps against U.S. curbs on its chip sector, launching an investigation into Nvidia for suspected violations of its anti-monopoly law. The announcement did not specify what violations the world’s leading chipmaker may have committed.

See also:

• Trump threatens 100% tariffs on nine nations – including China and India
• China signals focus on new tech at key economic policy meeting