China accelerates economic stimulus in fear of a trade war with the United States

Chinese Premier Li Keqiang called on local officials to immediately implement new plans to stimulate the country's economy. Earlier, the top leadership of the People's Republic of China announced increased stimulus measures for 2025.

Li Keqiang stressed that the ministries must act quickly in implementing the plans. One of the key areas of stimulation is domestic consumption. China intends to pursue a «moderately soft» monetary policy and use «more active» fiscal instruments.

These measures are being taken against the background of fears of a possible trade war with the United States, which may begin after Donald Trump takes office. Capital outflow from China has already reached record rates due to the tariff threat. Global funds have also started dumping Chinese bonds.

Last month, China experienced the largest ever outflow of funds from its financial markets. The prospect of higher tariffs in the United States creates additional risks for the world's second largest economy. According to the State Monetary Authority, local banks have transferred $45.7 billion abroad on behalf of their clients to invest in securities.