context: Following the breakthrough US–PRC Geneva trade talks, Chinese financial analysts are recalibrating their macroeconomic predictions. The tariff war that began during the first Trump administration had created substantial uncertainty for Chinese exporters, with average US tariff rates on Chinese goods reaching approximately 40 percent, significantly higher than rates applied to other trading partners. While exports have shown resilience in early 2025, with 6.4 percent y-o-y growth in the first four months, there remains structural pressure on employment, particularly for export-oriented SMEs that contribute over 90 percent of jobs in the foreign trade sector.
Financial analysts discussed macroeconomic policy direction following US–PRC trade talk breakthroughs, at an Interface News livestream event on 14 May
- Hu Wenyan 胡文艳 Chasing International Economic Research Institute senior macroeconomic researcher predicts fiscal policy will take a wait-and-see approach in the short term
- Geneva negotiations yielded better-than-expected results, easing external pressure
- the two sessions had already increased new government bond issuance by C¥2.9 tn compared to last year
- raised the broad deficit ratio by approximately 1.7 percentage points
- preemptively accounted for some external shock mitigation
- fiscal policy likely to maintain flexibility with potential for dynamic strengthening in the second half of the year depending on conditions
- Zhang Hao 张浩 Topsperity Securities macroeconomic team leader agrees no additional fiscal measures are immediately necessary
- government may deploy reserved tools like tax cuts and financial subsidies if three bottom-line concerns are triggered
- external tariff shocks
- employment problems
- systemic risks
- notes export pressure is evident despite overall resilience
- April exports to the US fell over 20 percent y-o-y
- overall export growth remained high at 8.1 percent in USD terms, supported by 'rush transshipment' factors
- recommends timely policies to help export-oriented enterprises maintain employment
- particularly important with university graduate numbers at peak levels
- government may deploy reserved tools like tax cuts and financial subsidies if three bottom-line concerns are triggered