To The Moon

China Announces Comprehensive Policy Package to Stabilize Economy and Engage in Talks

China has introduced a series of targeted economic support policies aimed at mitigating trade pressures and stimulating growth:

- Support for Tariff-Affected Firms: New policies will assist businesses impacted by trade restrictions.

- SME & Private Sector Financing: A dedicated financing framework will improve credit access for small and medium-sized enterprises (SMEs) and private companies.

- Capital Market Stabilization: Insurance companies’ equity investment risk thresholds will be lowered to bolster market confidence.

- Property Market Financing Reforms: A revised credit system will better align with the real estate sector's needs.

Monetary Policy Easing

The People’s Bank of China (PBOC) has rolled out stimulus measures:

- Reserve Requirement Ratio (RRR) cut by 50 bps, injecting liquidity into the banking system.

- Auto finance reserve ratio slashed from 5% to 0% temporarily.

- Policy rates reduced by 10 bps, with structural lending rates cut by 25 bps.

- Housing provident fund loan rates lowered by 25 bps to support homebuyers.

- RMB 300B in relending quotas allocated for tech innovation and industrial upgrades.

- RMB 500B in new lending facilities for elderly care and service consumption sectors.

- Capital market support tools expanded to RMB 800B, with a new risk-sharing mechanism for tech innovation bonds.

Diplomatic Developments

- Vice Premier He Lifeng, China’s top trade negotiator, will visit Switzerland (May 9–12) for talks with U.S. Treasury Secretary Bessent.

The Ministry of Commerce confirmed China’s conditional willingness to engage with the U.S., citing global economic stability and domestic industry interests as reasons.