China Ramps Up Fiscal Stimulus and Strikes EU Trade Deal Framework as Growth Pressures Mount

China intensified its fiscal push to meet its 2026 growth target, with Finance Minister Lan Foan calling on the ministry to ensure existing policies are fully implemented and to develop new, highly targeted measures to support the economy. Policymakers had already outlined a stimulus package before the Golden Week holiday break, with JPMorgan Chase economists characterizing the approach as "state-guided and supply heavy." The measures include plans to moderately raise funding limits to unlock consumption potential amid a broader economic slowdown.

Separately, China's Commerce Ministry confirmed that its minister held pragmatic and productive discussions with the EU trade chief, with both sides agreeing to properly manage their trade disagreements. The two parties also agreed to convene the third regular meeting of their bilateral trade mechanism in March 2027, signaling an intention to institutionalize dialogue at a time when the EU-China trade deficit has exceeded $1 billion per day and Europe has been pressing Beijing for rebalancing.