China urged to adopt more proactive fiscal policy amid Iran-Israel war, trade war risks
Beijing may need to spend more to preserve growth and long-term stability, central bank adviser says
Beijing should adopt a more proactive fiscal policy in response to rising global uncertainties, particularly following the outbreak of war in the Middle East, a central bank adviser said on Tuesday.
“What we see at the moment is rising uncertainties. We are very much worried about deglobalisation, trade, protectionism and so on,” he told a panel at the Summer Davos forum in Tianjin.
“If whatever outside uncertain factors cause a downturn of the domestic economy, I personally would be very much in favour of a proactive fiscal policy.”
On Monday, US President Donald Trump said that Israel and Iran had agreed to a “complete and total ceasefire” set to take effect within 24 hours. Both Iranian state television and the Israeli Prime Minister’s Office confirmed the truce on Tuesday.
But hours later, Israel’s military said Iran had launched missiles and that it would “respond forcefully”. Tehran denied the allegations.
Despite the fragile agreement, the outlook for China’s global trade remains uncertain.
Beijing and Washington have only reached a temporary truce following unprecedented tariff hikes in April, while relations with the European Union are also under strain.