China to loosen fiscal, monetary policies in wake of trade war: analysts

Beijing

CHINA'S government will loosen monetary and fiscal policies further to mitigate downside consequences of its trade war with the US, although the effects of tariffs on Chinese goods are expected to remain limited, analysts said.

On July 6, a first batch of tariffs came into effect targeting US$34 billion worth of Chinese goods.

Just days later, the Trump administration announced another 10 per cent on US$200 billion worth of Chinese goods. These could come into effect in October, after a public hearing period through the month of August.

All in, more than half of US imports from China will be impacted, responsible for more than 1.3 per cent of China's GDP.

These come just as the economy is facing domestic headwinds after more than 18 months of deleveraging and record low monthly credit and i…