China vows targeted measures as financial stability risks rise

China, targeted measures, rising risks, trade tensions

BEIJING: China said it will take targeted measures to cope with rising risks and challenges facing the nation’s finance sector amid slowing economic growth and trade tensions with the U.S.

The actions will be a combination of short-and long-term steps that will take into account both micro and macro factors to boost demand and create new growth drivers, the State Council said in a statement on Saturday. A meeting was chaired by Vice Premier Liu He on Friday.

"Complicated” international and domestic issues are posing more challenges currently and for the near future, according to the statement. 

China released figures this week showing growth in the world’s second-largest economy slowed to 6.2% in the second quarter, the weakest pace since at least 1992 when the country began collecting the data.

Chinese trade negotiators have yet to meet with their U.S. counterparts since President Donald Trump and President Xi Jinping agreed to a tentative truce late last month in Japan. 

Liu, who is leading trade talks for China, spoke with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer over the phone this week, but slow progress has raised concerns on how the trade tensions will play out.

Policy makers will continue to implement prudent monetary policy while adopting counter-cyclical adjustments in a timely and appropriate manner to ensure reasonable and ample liquidity, it said. 

The government will also work to resolve liquidity risks of small and medium-sized financial institutions and block contagion and expansion of risks, according to the statement. - Bloomberg