China’s top leadership is expected to meet as early as Wednesday to devise strategies for supporting the economy and stabilizing financial markets amid escalating trade tensions with the U.S., according to sources familiar with the matter.
Economists warn that the intensifying trade dispute could cut 1–2 percentage points from China's economic growth this year, worsen industrial overcapacity, threaten jobs, and increase deflationary pressure.
This upcoming meeting would be the first known high-level response since the U.S. President Donald Trump imposed steep "reciprocal" tariffs, nearly doubling duties on Chinese imports to 104%. Senior officials from the State Council and regulatory bodies, including the central bank and finance ministry, are expected to attend.
Discussions are likely to focus on boosting domestic consumption and supporting capital markets. Measures such as improving export tax rebates for local firms are also on the table, sources say.
While Beijing responded last week with counter-tariffs, analysts believe China is under pressure, especially given its ongoing property crisis and high local government debt. Confidence among businesses and consumers remains weak.
The Chinese government has yet to announce major consumer-focused stimulus measures, aside from a limited subsidy program. However, new initiatives may be rolled out in the coming weeks, sources suggest.
Premier Li Qiang stated on Tuesday that China is “fully capable” of mitigating external shocks, and that this year’s policies already consider global uncertainties.
In a move to stabilize the yuan, the People’s Bank of China has instructed major state-owned banks to reduce U.S. dollar purchases and limit speculative trades. This follows a 1.3% drop in the yuan this month, with the currency hitting 7.35 per dollar.
Despite pressures, officials ruled out a sharp yuan devaluation, emphasizing the need for stable financial markets. Instead, China may support key exporters through subsidies, tax breaks, and market diversification strategies.