The head of China’s central bank has reiterated plans for a supportive monetary policy aimed at fostering economic growth in 2025, particularly in light of potential trade disputes with the United States. Governor Pan Gongsheng emphasized the importance of counter-cyclical policy adjustments to address the sluggish economy and promised measures to ensure sufficient liquidity and lower borrowing costs for businesses and households.
The upcoming US presidency under Donald Trump could impose significant tariffs on Chinese imports, threatening China’s export-driven growth. In response, the yuan has dropped to its lowest value in nearly a year, raising concerns about weak growth. The People’s Bank of China has already implemented significant interest rate cuts and reduced the reserve requirement ratio, with further cuts anticipated soon. Additionally, Pan announced changes to the M1 money supply definition to enhance the accuracy of economic indicators, which will now include individual demand deposits and funds from digital payment platforms like Alipay and WeChat.