A Chinese central bank adviser and other experts are recommending that China implement a massive $209 billion stimulus package over the next year to combat economic challenges from US tariffs. They argue China's economy is under strain from deflation, a weak property sector, and reduced exports due to 20-30% US tariffs.
The proposed response includes lowering interest rates, encouraging banks to cut lending rates, and keeping the yuan flexible to handle external pressures. The experts also suggest tax reforms like expanding income tax coverage and simplifying sales tax structures. They highlight growing concerns about small business loans, which now represent over 60% of China's GDP and pose a greater risk than local government debt.
The recommendation reflects growing urgency among Chinese policymakers to address mounting economic headwinds through significant fiscal intervention.
