1/20

The Chinese central bank could soon resume the purchase of government bonds, after putting the practices on ice at the start of the year.

The move embodies the joint coordination of monetary and fiscal policy by China that sets it apart from other major economies.

A 🧵: 2/20

Macroeconomic policy refers to government policies that affect the economy as a whole - in particular aggregate levels of demand..

Its two main branches are fiscal policy - government spending and taxation decisions - and monetary policy - interest rates and the money supply.

1/14

China hopes to supercharge domestic consumption by providing fiscal subsidies for consumer credit.

The move arrives in the wake of Beijing’s campaign to subsidise household consumption of goods and services including EVs and smartphones.

What you need to know 🧵: 2/14

In August, China’s Finance Ministry said it would engage in the unprecedented move of providing subsidies to consumer-related loans, in a bid to boost domestic demand.

The two subsidies were referred to as the “Dual Interest Discounts” (“双贴息”).

1/11 China’s war against deflation means cracking down on market competition

Western economies have waged a hard-fought battle against inflation since the Covid pandemic.

China has faced the opposite problem, however, with Beijing instead fighting deflationary pressure (🧵): 2/11

China’s June CPI remained in slight deflation for the first half at -0.1% YoY, while PPI deflation stood at a heavy -2.8%.

PPI for June fell further into deflation, hitting -3.6% YoY for its lowest point since the start of the year, and its 33rd month of negative growth.

1/14

🚨Xi will capitalise upon the unforced error of Trump’s tariffs war to drive the global rise of the Chinese yuan.

That’s the opinion of China’s most prestigious think tank, whose top economist has hashed out new policy game plan.

Everything you need to know 🧵: 2/14

Zhang Ming (张明), deputy-head of the Chinese Academy of Social Sciences’ (CASS) Financial Research Institute, just published a key piece of economic policy advocacy in The Banker (银行家) magazine.

1/10

Xi Jinping just convened a meeting of one of the Communist Party’s most powerful economic and financial policy bodies.

On 1 July, the Central Financial and Economics Affairs Commission (中央财经委员会) held its sixth meeting in Beijing.

Everything you need to know🧵: 2/10

CFEAC is a commission of the Communist Party's Central Committee - the highest organ of the Party when its National Congress isn't in session.

It’s responsible for supervising the economic policy of the Party and China’s State Council, and is under the direct leadership of Xi Jinping.

1/15

China’s central bank chief just said he wants to end the US dollar’s global dominance.

He DOESN’T want the Chinese yuan to replace the greenback, however.

Beijing has another plan, which involves working closely with the IMF.

Everything you need to know (🧵): 2/15

Pan Gongsheng (潘功胜), China’s central bank chief, just delivered a speech at the 2025 Lujiazui Forum, held from 18 - 19 June in Shanghai's riverside financial district.

In the speech, he outlined China's vision for the future of the international monetary system.

1/15

The chief of research at China's central bank just unveiled its blueprint for financial transformation.

Beijing wants China to become a "great financial power" globally.

It also wants stock and bond markets to play a central role in China's technological rise (🧵): 2/15

On 18 May, Ding Zhijie (丁志杰) ,the head of the Chinese central bank's research department, presided over the release of the "China Financial Policy 2025 Report" (中国金融政策报告2025) at the Tsinghua PBCSF Global Finance Forum.

1/12

The Chinese central bank is unleashing an arsenal of monetary policy measures to deal with Trump-induced economic turmoil.

The goals are also to drive Chinese technological innovation and boost lacklustre domestic consumption.

A thread (🧵): 2/12

Pan Gongsheng (潘功胜), the governor of the People’s Bank of China (PBOC) - China’s central bank - said the authority would launch 10 key monetary policy measures in the wake of the economic uncertainty unleashed by Donald Trump’s Liberation Day tariffs.

1/11

The imminent threat of Trump's trade war has smashed a long-standing Chinese taboo on deficit spending.

That's the opinion of a leading Chinese economist, who highlights Beijing's plans for a record-high deficit ratio in 2025 (🧵): 2/11

At the end of last year, Beijing signalled plans for a major stimulus package in 2025, when it made reference to the need for "even more active fiscal policy."

Beijing followed by raising the official deficit ratio to 4% for the first time on record, at the 2025 Two Sessions congressional event held in March.

1/8

The head of China's central bank just met with the central bank governors and finance ministers of other Asian economies in Milan.

He called for Pan-Asian unity in the face of Trump's tariff war.

Here's what you need to know (🧵) 2/8

Pan Gongsheng (潘功胜) the head of the People's Bank of China (PBOC - the Chinese central bank) attended the 29th ASEAN + 3 Finance Ministers and Central Bank Governors' Meeting in Milan, Italy, from 4 -5 May 2025.

1/9 China unveils new law to drive the growth of private enterprise.

On 30 April, the Chinese central government officially released the "Private Economy Expediting Law" (民营经济促进法). The law is scheduled to come into effect on 20 May.

According to domestic commentators, the new law is China's first item of "foundational legislation that focuses on the development of the private economy." 2/9

Jiang Zemin first affirmed the role of the "socialist market economy" in China 33 years ago, at the 14th National Congress of the Communist Party.

The Private Economy Law now seeks to enshrine the role of private enterprise in China's socialist market economy system.

1/6 Our briefing on critical developments in China's economic policy discourse as of 2 May, 2025. 2/6

China's use of macroeconomic policy to prop up growth is unsustainable, according to Huang Yiping (黄益平), head of Peking University's National School of Development. He believes China's economic future depends upon the greater use of industrial policy and reforms to support private enterprise.

1/12
The Chinese cabinet just released a special white paper on the rapidly escalating trade war between Beijing and Washington.

It spells out China’s official stance, and how it’s portraying the conflict for a domestic audience.

Everything you need to know (🧵): 2/12

On 9 April, the State Council’s media office released the “Chinese Stance on Several Issues in Relation to Sino-US Economic and Trade Relations” (关于中美经贸关系若干问题的中方立场).

The white paper seeks to “clarify the facts of Sino-US economic and trade relations, and fully explain China’s policy stance on related matters.”

1/23 Trump’s shock tariffs will actually increase China’s trade surplus and its dependence on external demand, argues one of the country’s leading economists.

He says this makes the transformation of China’s economic model an even more urgent mission.

A mega-thread (🧵): 2/23

Guan Tao (管涛 ), chief economist at Bank of China’s investment banking vehicle, has conducted a comparison of Trump’s latest round of tariffs, with the first salvos fired in the Sino-US trade war back in 2018.

1/14

The Chinese central bank just committed to keeping the stock market afloat at its “weather vane” Q1 monetary policy meeting.

It also wants to channel more credit to China’s burgeoning tech sector.

Here’s everything you need to know 🧵: 2/14

The People’s Bank of China (PBOC) - being the Chinese central bank - holds monetary policy meetings on a quarterly basis to issue key policy signals on its upcoming decisions.

It held its first quarter monetary policy meeting for 2025 on 18 March.

1/9 China just kicked off the most important event on its annual political calendar - the Two Sessions meeting of its congressional bodies.

Here are ten key economic takeaways from the event’s Government Work Report for 2025 🧵: 2/9

1. China has once again set its annual economic growth target at 5%, the same as the targets for 2023 and 2024.

State-owned media said that the target remains “within the vicinity of China’s growth potential,” which policymakers expect to sit at around 5% throughout the course of the 14th Five Year Plan (2021 - 2025).

The goal is for China to hit mid-tier developed nation status by 2035, which would require average per annum growth of 4.73% from 2021 - 2035.

1/15

China’s Ministry of Finance has struck back at deficit doves who want Beijing to rack up huge government debts.

The ministry just published a provocative article to warn the Chinese public of the perils of unchecked deficit spending.

Here’s everything you need to know (🧵): 2/15

China is on the verge of launching huge monetary and fiscal stimulus this year, to deal with the headwinds created by an adversarial Trump administration.

Some leading Chinese economists - such as Yu Yongding (余永定), a member of the prestigious Chinese Academy of Social Sciences (CASS) have come out as fervent advocates of increased deficit spending, considering it a necessary means of maintaining GDP growth.

(Thanks for reading! Deepen your understanding of China's economy by following our official account on X, or signing up for our free email briefings read by analysts and executives at the World Bank and J.P. Morgan: chinabankingnews.com.)

1/20

Xi Jinping just declared that he’s always been an advocate for private enterprise.

This comes as rude shock for CNN - which has reported on a private sector crackdown - and ex-Aussie PM Kevin Rudd, who claims Xi is a die-hard Leninist-Marxist.

Where does the truth lie🧵: 2/20

On 2 March - the eve of China’s Two Sessions congressional event, the Xinhua News Agency published a long-form article entitled:

“‘I have always supported private enterprise’ - Comrade Xi Jinping’s Record of Concern and Driving Support for Private Economic Development” (“我是一贯支持民营企业的”——习近平同志关心推动民营经济发展纪实).

1/12

China’s central bank will keep the monetary spigot turned up high for at least a decade, according to a top Chinese economist.

It needs to do this to keep GDP growth at roughly 5% for a decade, and achieve Xi’s long-term economic ambitions.

What you need to know (🧵): 2/12

At the end of 2024, China’s Central Economic Work Conference announced that it would implement “moderately loose monetary policy.”

The last time Beijing made use of this phrase was 14 years ago, in the immediate aftermath of the Global Financial Crisis, when it launched a mammoth four trillion stimulus package to keep the economy afloat.

1/14

🚨China’s CPI inflation has been less than 2% on average for over a decade.

PPI inflation has been negative for at least two years.

A top Chinese economist says this gives Xi Jinping room for a huge 10 trillion yuan stimulus plan to weather a Sino-US trade war (🧵): 2/14

Yu Yongding (余永定 ), a member of the prestigious Chinese Academy of Social Sciences (CASS), has emerged as one of the strongest advocates of forceful macroeconomic stimulus amongst prominent Chinese economists.

1/10

China urgently wants to attract more foreign investment to drive its technological ascent.

Foreign-funded R&D in China has leaped more than 86% in just a decade.

Beijing has now launched a special action plan to bolster foreign investment into China in 2025 (a 🧵): 2/10

On 19 February, Beijing officially unveiled the “2025 Foreign Investment Stabilisation Action Plan” (2025年稳外资行动方案).

The Plan commits to “expanding the orderly and independent opening up” of the Chinese economy, as part of efforts to stabilise levels of foreign investment.