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Chief China economist at Macquarie Larry Hu revealed in a note on Wednesday that Beijing will use stimulus to offset tariffs. He argued that China will optimize the stimulus to boost the country’s growth at around 5%. Hu also acknowledged that any additional measures will likely arrive after the state’s officials assess the impact of tariffs on growth. China is expected to release its official first quarter GDP data in mid-April. The growth data will be followed by a meeting of the decision-making body Politburo to discuss economic policy at the end of April. Larry Hu believes China will use stimulus to offset tariffs Beijing’s leadership set an ambitious growth target this year in the wake of trade war worries with the United States. On Wednesday, the country set its GDP growth target at “around 5%” for 2025. Larry Hu believes that the target seems harder to reach given rising trade tensions with the U.S. and persistently weak domestic consumption. “Beijing’s target of around 5 percent growth amidst ongoing trade tensions with the U.S. speaks volumes about their strategic economic confidence. It will be interesting to see how this plays out in their global economic interactions.” –Greg Shockey, Chief Strategy Advisor at Pointward. Chinese Premier Li Qiang highlighted that the nation faces external challenges that were unseen in a century. Qiang revealed in a speech at the opening of the annual parliamentary meeting that China’s challenges were “unfolding across the world at a faster pace.” The U.S. president issued a cumulative 20% new tariffs on Chinese imports in just a month and threatened more to come as soon as early April. The tariff woes have strained China’s exports in the midst of its slowing economy. The country’s officials have been pressured to include more forceful stimulus measures to boost domestic…

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Filed under: News - @ March 6, 2025 2:26 pm