Beijing pledges support for economy, rejects U.S. tariff claims

As Trump talks deals, Beijing insists the U.S. stop "creating confusion"

Welcome back to What’s Happening in China, your weekly China brief.

TIME: Will you call President Xi if he doesn’t call you?
Trump: No.
TIME: You won’t?
Trump: Nope.
TIME: Has he called you yet?
Trump: Yep.
TIME: When did he call you?
Trump: He's called. And I don't think that's a sign of weakness on his behalf.

This is an excerpt of Donald Trump’s ‘100 Days’ interview with TIME. In what has become a routine resembling a Marx Brothers or Mel Brooks production, the same day the interview was published, answering a question from Reuters, the spokesperson of the Ministry of Foreign Affairs, Guo Jiakun, said that “China and the U.S. are not having any consultation or negotiation on tariffs. The U.S. should stop creating confusion.”

It’s become hard to track the weekly barrage of statements and counter-statements from both sides.

While Trump and Treasury Secretary Scott Bessent this week suggested an easing of tensions with the PRC, on Thursday, He Yadong, Ministry of Commerce spokesperson, repeated that “If the US truly wants to solve the problem, it should . . . completely cancel all unilateral tariff measures against China and find a way to resolve differences through equal dialogue.”

Meanwhile, in a politburo meeting chaired Friday by Xi Jinping, Beijing “called for efforts to accelerate the implementation of more proactive and effective macro policies, and make full use of a more proactive fiscal policy and a moderately loose monetary policy,” and vowed to offer support “for enterprises that suffered relatively bigger impacts from tariffs.”

While Washington seems to be taking a step back in its assertiveness, Beijing doesn’t yet appear to feel the need to do the same. Trump blinked first.

Let’s jump into it.

— PC

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Through the Lens

Man getting a haircut on the street in Beijing.

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In Focus

I. More support, but no bazooka

China plans to help struggling businesses with targeted measures in the face of “increased external shocks,” according to a readout of a meeting chaired Friday by President Xi Jinping.

The meeting of the Politburo, the second most powerful political body in China, comes as tensions between Washington and Beijing have escalated this month with new tit-for-tat tariffs of more than 100%. Major Wall Street banks have cut their China GDP forecasts for the year as a result, while the country still strives to achieve its lofty goal of “around 5%” growth set in March.

Authorities called for “multiple measures to help businesses in difficulty,” such as financial support, according to the Chinese-language readout, translated by CNBC.

The Politburo also called for “timely reduction” of interest rates and the reserve requirement ratio — the amount of cash banks need to have on hand.

Policymakers are sticking with their stance from earlier this year, while indicating flexibility for targeted measures, said Zong Liang, chief researcher at Bank of China. For mitigating the impact of tariffs, he expects China will do more research on specific businesses, and consider how to support them.

Read: China pledges to ramp up targeted support for businesses as U.S. trade war hits (CNBC)

Related:

• China rolls back retaliatory tariffs of 125% on some US-made semiconductors, import agencies say (CNN)

• China, US seek to portray each other as bullies at UN (Reuters)

• China urges Japan to help fight US tariffs together, Kyodo reports (Reuters)

• Beijing threatens countermeasures against countries that ‘appease’ Washington in trade war (The Guardian)

• Chinese Manufacturers Seem Ready for a Trade War (The Atlantic)

• Trump’s fixation on a tariff battle win against China could cost him the trade war (Politico)

• What If China Wins the Trade War? (The Atlantic)

II. Keep your hands on the wheel

China’s Ministry of Industry and Information Technology held a meeting last week with at least a dozen automakers to issue tightened rules over driver assistance technology, in a move that may slow the deployment of such systems by manufacturers.

According to a statement released by the agency Wednesday, automakers will now be required to be clearer about what the technology can and can’t do and improve safety precautions. Manufacturers also can’t exaggerate or falsely advertise driver assistance features.

But one person familiar with the conversations that took place during the meeting said the discussions went further. Officials also laid out rules to avoid describing advanced driver assistance systems as “self-driving” and to encourage drivers to keep their hands on the steering wheel while using such features, the person said, asking not to be identified because they’re not authorized to speak publicly.

MIIT officials also told carmakers they should not hold test events involving customers before a product is finalized and they shouldn’t allow drivers to use the self-parking feature unless they are actually in the vehicle, they said. In China, several carmakers have functions that allow a driver to step outside their car while the car parks itself kerbside.

Read: China Reining In Smart Driving Tech Weeks After Fatal Crash (Bloomberg)

Related: Bringing AI Down to Earth (China Media Project)

III. China Aid

Charities and developing nations are grappling with funding shortfalls in public health programs after President Donald Trump slashed US foreign aid commitments.

But those hoping that China might step in to fill the gap are likely to be disappointed, as exclusive data analyzing its foreign aid commitments of the last two decades show.

For one, China’s total grant and loan commitments of $9.76 billion in the decade up to 2022 are less than the $12 billion that the US spent on global health projects in in 2024 alone, according to data provided by William & Mary’s AidData research lab. And while the US largely gave to public health programs organized by nonprofits or multilateral organizations, China’s aid is dominated by bilateral loans and donations directly to individual governments.

“China is very strategic in the way that it uses its lending and assistance dollars, even in the health space,” said Samantha Custer, AidData’s director of policy analysis. “There’s either reputational, strategic or geopolitical benefits.”

Beijing often ties access to assistance to backing China’s preferred policy positions, she added.

A 2024 study found that support for China on human rights issues was “significantly related” to medical assistance from Beijing during the Covid-19 pandemic. Also, one of the main guiding principles since China first started providing foreign aid in the 1960s was “mutual benefit” by which it never regarded assistance as unilateral.

One reason it will be difficult for Chinese money to fill the funding void is that the US and China provide health assistance in very different ways. The United States Agency for International Development (USAID) prioritized public health issues such as HIV, tuberculosis, malaria and family planning, providing grants to nonprofits and the private sector or multilateral organizations like the Global Fund or Gavi.

The majority of US financing came from the Department of State and USAID. Most of those initiatives have now been terminated or put on hold after Trump in January ordered a pause to all US foreign aid, with some exceptions, arguing that it’s not aligned with American interests.

Beijing, meanwhile, prefers direct bilateral assistance. China’s health-related foreign aid has come in fits and starts and disclosure has been spotty at best, a far cry from the systemic and sophisticated approach spearheaded by the US, according to Wenhui Mao, assistant director of programs at Duke Global Health Innovation Center. It is dominated by lending and loan guarantees extended to governments, mainly focused on building infrastructure. China’s largest health-aid project was a $850 million loan to Cuba over several years for the construction and renovation of hospitals.

Although China is unlikely to fill the gap, Karen A. Grépin, associate professor at the University of Hong Kong’s School of Public Health, said Beijing is likely to “take advantage of the situation to establish itself as a more important donor and powerful agent in this space.”

Read: China Has Long Way to Go to Fill Void Left by Trump's US Aid Cuts (Bloomberg)