China Announces $139 Billion Stimulus Ahead of US Trade Talks

China has introduced a sweeping set of economic stimulus measures, including a major liquidity injection and interest rate cuts, ahead of the first high-level US-China trade talks since the recent escalation of tariffs. The People's Bank of China lowered its seven-day reverse repo rate and reduced the reserve requirement ratio for banks, aiming to bolster critical sectors like technology and consumption while preparing for potential protracted trade negotiations. These actions are seen as both a move to stabilize China's economy under mounting trade pressure and to strengthen its bargaining position in talks with US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. Investors have responded positively, with Chinese stock markets rising on the news, though overall market sentiment remains cautious due to ongoing uncertainties. Analysts note that the stimulus could provide China with more leverage at the negotiating table, as domestic economic strength is viewed as essential before engaging in prolonged trade disputes. The outcome of the talks in Switzerland will be closely watched, with both sides seeking to de-escalate tensions that have disrupted global markets and supply chains.