CHINA – China pledged Thursday to increase the budget deficit, borrow more and loosen monetary policy to maintain stable economic growth as it girds for more trade tensions with the United States where Donald Trump soon is returning as president. The remarks came in a state media readout of an annual agenda-setting meeting of China’s top leaders, known as the Central Economic Work Conference, held on December 11-12.

“The adverse impact brought by changes in the external environment has deepened,” national broadcaster CCTV said following the closed-door CEWC. This year’s meeting came with the world’s second-largest economy stuttering due to a severe property market crisis, high local government debt and weak domestic demand. Exports, one of the few bright spots, face the threat of higher US tariffs.

A separate readout from state news agency Xinhua, watched by financial markets for references to the yuan currency, kept a pledge to “maintain the basic stability of the exchange rate at a reasonable and balanced level”. The CEWC pledges match the tone of one of the Communist Party leaders’ most dovish statements in more than a decade, which was released Monday after a meeting of the Politburo, a top decision-making body. The Politburo said China would switch to an “appropriately loose” monetary policy stance and “more proactive” fiscal levers, as well as stepping up “unconventional counter-cyclical adjustments.” (CNN)

Photo: Shipping containers and gantry cranes at Qingdao port in eastern China’s Shandong province.