China goes all out to boost its economy during trade talks, while the effect of U.S. stimulus fades

China goes all out to boost its economy during trade talks, while the effect of U.S. stimulus fades

China has been ratcheting up the stimulus it is throwing at its economy and financial markets, at a time when the U.S. is expecting the effects of tax cuts and other stimulus to fade. China’s actions come against the backdrop of the U.S.-China trade talks and could be an important backdrop for the talks if China’s economy stabilizes and U.S. growth begins to slow as expected, in the second half. J. P. Morgan CEO Jamie Dimon weighed in on China’s easy money policy Wednesday when he spoke to the Economic Club of New York. As the U.S. and China negotiate on trade, Beijing is working overtime, pulling multiple levers to steady its lagging economy and boost markets. China’s central bank on Wednesday injected a record $83 billion into the financial system, seeking to avoid a cash crunch. The move is the latest in a series of stimulus efforts by Chinese officials, who have been working to assure investors that more spending and other types of policy support would be forthcoming. Premier Li Keqiang Wednesday acknowledged the economy faces difficulties and said the government aims to keep growth within a reasonable range through further stimulus. In some regards, that could tip the scale eventually in trade talks. Trump administration officials have said China’s weak economy is a factor that has brought Beijing’s negotiators to the table. But economists expect China’s economy to stabilize by the middle of the year, around the time some expect U.S. growth to head lower, to […]

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