China has ample policy room to weather economic headwinds: economist

BEIJING, April 18 (Xinhua) -- China's policymakers have ample tools to mitigate potential downside risks brought by tariffs and property woes, an economist has said.

China's economy started 2025 on a solid footing, with the gross domestic product (GDP) growing by 5.4 percent year on year in the first quarter. While the data beat forecast, the world's second-largest economy may still see headwinds in the coming months, weighed down partly by weakening exports and a downturn in the property market, said Lu Ting, chief China economist at Nomura, at a press briefing.

However, the country has a robust toolkit to tackle the challenges. For instance, on top of existing policies to boost sales of durable goods such as home appliances and automobiles, policymakers have the option to further lift household spending by encouraging service consumption, such as travel and dining, he said.

In addition, raising farmers' pension payments may also be an effective way to boost consumption as the measure would increase the group's willingness to spend while at the same time cutting the burden of their children, who are often blue-collar workers who tend to save for their parents.

"It might be an opportunity to push for some reforms that we may have previously thought were not so urgent," Lu said, adding that the effectiveness of fiscal stimulus is much more important than the amount of the stimulus package.

On the monetary front, the People's Bank of China has ample liquidity tools to send positive signals to the market, Lu said. In addition to the potential use of interest rate and reserve requirement ratio cuts, the central bank has various tools at its disposal, including the buying and selling of government bonds, ensuring high flexibility in monetary operations. ■