China unveils new stimulus package to bolster struggling economy as trade talks with US loom

The Chinese government has released a range of stimulus measures as it prepares to meet with US officials to discuss the current tariff issues.

The new items include interest rate cuts and a significant liquidity injection, as China looks to boost an economy that has been hit hard by the trade war with the US.

Recent reports have suggested that April saw China’s factory activity contract at its fastest pace in 16 months.

Central bank action

The People’s Bank of China (PBoC) has unveiled its first Required Reserve Ratio cut of 2025, along with a policy rate reduction.

It also announced additional liquidity support and new lending facilities introduced to boost consumption and technology investment.

The China Securities Regulatory Commission will also introduce a number of measures aimed at supporting the country’s share market.

US-China meeting

The announcements come after it was revealed that US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s top economic official He Lifeng in Switzerland this weekend.

Analysts regard the talks as a potential first step toward in resolving the trade war currently disrupting the global economy.

The Chinese economy is struggling under the triple-digit tariff levies Donald Trump has handed down since taking up the reins as president.

Gold buying spree

The news of the Chinese stimulus measures and buying had an early impact on the gold markets, as did reports of continued buying by the PBoC.

China’s central bank has been significantly expanding its precious metal holdings for six consecutive months.

The PBoC reportedly added approximately 70,000 ounces to its reserves In April, continuing a strategy that has brought nearly 1Moz into national holdings during this period.