Chinese officials reaffirmed their focus on boosting employment and maintaining economic stability amid ongoing US trade tensions, according to Zhao Chenxin, Vice Chairman of the National Development and Reform Commission.

Zhao said the government will keep improving policies to stabilize jobs and the economy, expressing confidence in reaching the 2025 growth target of about 5%.

This announcement follows recent commitments by the Politburo, led by President Xi Jinping, to prepare for external economic disruptions.

The government noted the economy’s resilience in the first quarter, driven largely by stronger domestic demand, even as US tariffs weigh on exports and job prospects.

Despite economic pressure, China remains cautious about launching major stimulus efforts and denied reports of renewed trade talks with the US, again urging the removal of tariffs.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ China’s economic resilience strategies evolve with each trade conflict

China’s current approach to the trade war draws from a playbook refined during previous economic tensions, showing increasing sophistication.

When the first round of trade tensions escalated in 2018-2019, China faced tariffs on $250 billion worth of products, responding with counter-tariffs on $110 billion of US goods 1.

This experience led China to develop more targeted stabilization tools rather than flooding the economy with broad stimulus, explaining officials’ current message that they’re “in no rush to be aggressive in expanding economic stimulus.”

The economic impact has been significant, with Chinese financial markets suffering during previous rounds. The Shanghai Composite dropped nearly 25% and Hang Seng over 13% in 2018 alone 2.

China’s emphasis on “contingency plans” and a “policy toolbox” demonstrates lessons learned from 2018-2019, when immediate retaliatory measures proved insufficient for long-term economic stability.

Previous trade tensions accelerated Beijing’s shift toward its “dual circulation” strategy that prioritizes domestic consumption, explaining the current focus on domestic demand that officials highlighted as making a “stronger contribution” to recent growth.

2️⃣ Structural challenges compound trade war pressures

The current trade tensions hit China during a period of significant internal economic vulnerabilities that complicate policy responses.