Finance

The capital of Malawi, one of the world’s poorest countries, runs on aid. A city built in the 1970s by the World Bank, Lilongwe’s straight streets are filled with charities, development agencies and government offices. Informal villages house cooks and cleaners for foreign officials; the entrance to each is marked with the flag of its national sponsor. Over the past five decades, policymakers have reached a division of labour: Britain funds schools, Japan backs energy projects, Europe supports agriculture and Ireland nurtures a cottage industry of justice activists. In the health ministry, maintained with Chinese money, doors are labelled by donor, not department. Many read “USAID”. More

Canada’s business press remained sanguine. Belligerent statements by the American president, one Toronto-based newspaper wrote, were mere campaign rhetoric; he would ultimately decide against tariffs that might “arouse resentment in Canada”. Such confidence turned out to be gravely misplaced. In 1930 Herbert Hoover signed into law the infamous Smoot-Hawley tariffs, named after their congressional sponsors. The average levy on American imports increased from 40% in 1929 to 60% by 1932, and the global trade system unravelled. More

China has more room to act on fiscal policy amid domestic and external uncertainties, Finance Minister Lan Fo’an told reporters on Thursday.
China on Wednesday announced it was raising its on-budget deficit to 4% of the country’s gross domestic product — the highest since at least 2010.
“China has delivered a pro-growth message here at the [National People’s Congress], in line with expectations,” said Aaron Costello, head of Asia at Cambridge Associates.

China’s Minister of Finance Lan Fo’an speaks during a press conference in Beijing on Nov. 8, 2024. 
Adek Berry | Afp | Getty Images

BEIJING — China has more room to act on fiscal policy amid domestic and external uncertainties, Finance Minister Lan Fo’an told reporters on Thursday.
He was responding to a question during China’s “Two Sessions” annual parliamentary meeting about the country’s plans for proactive fiscal policy this year. The gathering this year comes as U.S. President Donald Trump has raised tariffs on Chinese goods for the second time in roughly a month. Beijing has responded to Washington’s latest levies with targeted duties and restrictions on U.S. companies.

China on Wednesday announced it was raising its on-budget deficit to 4% of the country’s gross domestic product — the highest since at least 2010.
The government also plans to issue 1.3 trillion yuan ($178.9 billion) in ultra-long-term special treasury bonds in 2025, marking a 300 billion yuan hike from last year. The increased amount is primarily set to support the consumer trade-in program.
China said it aims to issue 4.4 trillion yuan of local government special-purpose bonds this year — or a 500 billion yuan increase from last year — to help ease the financial strains of local authorities.

China has made spurring consumption its top priority for the year ahead, according to a government work report shared Wednesday. Zheng Shanjie, head of the National Development and Reform Commission, the top economic planner, on Thursday said that a more detailed plan for boosting consumption would be released soon.
The country on Wednesday also said it would target a GDP increase of around 5% this year, while lowering its inflation target to 2% — the lowest in around 20 years.

“China has delivered a pro-growth message here at the [National People’s Congress], in line with expectations,” said Aaron Costello, head of Asia at Cambridge Associates. The NPC is part of the “Two Sessions” meeting.
Costello noted that, beyond specific stimulus programs, the bigger issue facing China has been low business and consumer sentiment. He pointed to encouraging signals such as Chinese President Xi Jinping’s meeting with many tech entrepreneurs last month to encourage private business growth.

Rising trade tensions

Officials speaking on Wednesday and Thursday have emphasized that it will take hard work for China to reach its 5% target. China’s economy grew by 5% last year, but benefitted from strong exports that offset lackluster consumption and the drag from domestic real estate.
When asked about U.S. trade tensions, Minister of Commerce Wang Wentao reiterated Beijing’s strong language on the trade tensions, but called for the two sides to meet soon for discussions.
Other officials speaking Thursday did not name U.S. trade dealings explicitly, but a few made uncharacteristic public allusions to the White House’s growing restrictions on China. The U.S. has blacklisted several major Chinese tech companies and limited their access advanced semiconductors for training artificial intelligence models.
“The more others pressure us, block us, it will only push us to innovate independently,” Zheng said in Mandarin, translated by CNBC. He spoke while talking up China’s exports of integrated circuits and robotic development.
When laying out measures to support technological development, the head of China’s central bank, Pan Gongsheng, said that, while the country welcomed foreign investors, it “opposed the establishment of improper investment barriers.” More

The undercurrent of China’s annual parliamentary meetings this week is U.S. trade tensions — and how Chinese technology is offsetting that pressure.
“Internationally … an increasingly complex and severe external environment may exert a greater impact on China in areas such as trade, science and technology,” Chinese Premier Li Qiang said in his annual report on government work.
Among the top priorities for the year, Li said, is supporting “the extensive application of large-scale AI models.”

A security guard watches during the opening session of the National People’s Congress (NPC) in the Great Hall of the People in Beijing on March 5, 2025. 
Wang Zhao | Afp | Getty Images

BEIJING — The undercurrent of China’s annual parliamentary meetings this week is U.S. trade tensions — and how Chinese technology is offsetting that pressure.
The largely ceremonial gathering of delegates in Beijing this year came just as U.S. President Donald Trump addressed Congress and imposed new tariffs on Chinese goods. It’s a clear drag on exports, while Chinese companies have only faced tougher restrictions on accessing high-end semiconductors and other advanced tech.

“Internationally … an increasingly complex and severe external environment may exert a greater impact on China in areas such as trade, science and technology,” Chinese Premier Li Qiang said in his annual report on government work at the opening ceremony of the National People’s Congress on Wednesday, according to an official English translation of the Chinese.
It was an unusually grim assessment at least among the seven parliamentary meetings I have attended. But I also sensed a greater willingness to support the private sector than in the past — especially as it relates to tech innovation, such as with Chinese AI company DeepSeek.
“We will promote the healthy and well-regulated development of the platform economy and give better play to its role in inspiring innovation, expanding consumption and stabilizing employment,” Li said in the work report.
That marked the latest signal that Beijing now wants to support the private sector after previously taking a far more restrictive stance and imposing large fines on tech giants Alibaba and Tencent, often called “platform“ companies in China. Many companies and industries in China have historically been dominated by the state.

DeepSeek’s recent rise demonstrated to many international investors — who had grown cautious on the slowing economy — how a Chinese company could compete with the U.S. on AI, regardless of White House sanctions.

Beijing was quick to affirm the startup’s success. DeepSeek’s Liang Wenfeng attended a meeting with Premier Li in January, and a symposium with Chinese President Xi Jinping in February.

AI to counter protectionism?

While DeepSeek didn’t get a specific mention in the government work report, a member of the team that drafted the report named it — and applications such as Kuaishou’s Kling AI for video generation — while talking to the press on Wednesday about China’s rapid AI development.
“Historically, technological progress is often an important force for breaking through barriers and protectionism,” Chen Changsheng, who is also deputy director of the State Council Research Office, said in Mandarin translated by CNBC.
“We look forward to how under the current international backdrop, AI will become a positive energy to promote cooperation and multilateralism,” he said.

HONG KONG, CHINA – JANUARY 28: In this photo illustration, the DeepSeek apps is seen on a phone in front of a flag of China on January 28, 2025 in Hong Kong, China.  
Anthony Kwan | Getty Images News | Getty Images

“Tech” got one more mention in this year’s report versus last year, and “reform” got 10 more mentions, according to the Chinese-language versions. Tech self-reliance also got its own sub-section in China’s latest annual work report, in contrast to a passing mention in 2024.

A new law

China’s legislature has been discussing a new law to support the private sector. Beijing has said it would be enacted as soon as possible after further discussions and revisions.
This year, policy will likely be driven more from the bottom up, rather than the top down, said Ding Wenjie, investment strategist for global capital investment at China Asset Management Co., according to a CNBC translation of her Mandarin-language remarks.
She expects growth in AI and leading tech to spur development of other industries, but cautioned that it will likely take companies more than just one or two quarters to see results.
China’s parliamentary meetings officially wrap up early next week. More official comments on tech and the private sector law are expected to trickle out in coming days.
Among the top priorities for the year ahead, Premier Li said, is supporting “the extensive application of large-scale AI models.” Beijing plans to increase funding for biomanufacturing, quantum technology, AI-linked robotics and 6G technology.

The industry-specific goals come as China is trying to boost consumer spending, minimize the drag from real estate and navigate trade tensions with the U.S.
China’s “policy focus is to accelerate AI adoption and autonomous driving, while make gradual progress in restructuring housing and [local government financing vehicle] debt,” Morgan Stanley’s chief China Economist Robin Xing and a team said in a note Wednesday. They noted that the “fiscal package came as expected: a [2 trillion yuan ($280 billion)] expansion with mild support on consumption.”
Chinese official comments during this week’s meetings hint at a preference for open-source models.
Chen on the work report drafting team warned against “excessive” use of private AI projects that could fragment the market, and instead called for “large-scale applications.”
China will also work to increase computing capacity and develop “a system of open-source models,” the economic planning agency, called the National Development and Reform Commission, said in its plan for the year ahead. More

Keeping abreast of Donald Trump’s utterances on tariffs, from actual announcements to vague threats, is a dizzying task. One day he is set on wrecking the integrated North American economy; the next he wants to appease carmakers that depend on it. When it comes to China, he veers between slapping ever-larger levies on its goods and hinting at a desire for a giant trade deal. As for other countries, he speaks ominously of big but so far unspecified tariffs that will soon kick in. More

California paused an energy rebate program for consumers who make their homes more energy efficient, due to a federal funding freeze imposed by the Trump administration.
The Home Energy Rebate program was created by the Inflation Reduction Act, which President Biden signed in 2022.
The law offered consumers up to $8,000 of Home Efficiency Rebates and up to $14,000 of Home Electrification and Appliance Rebates.

The U.S. Department of Energy on Feb. 14, 2025 in Washington, D.C.  
Anna Moneymaker | Getty Images News | Getty Images

California has paused rebate programs offering thousands of dollars to consumers who make their homes and appliances more energy efficient due to a Trump administration freeze on federal funding.
While a handful of other states also recently halted their programs, California is the largest state to delay a rollout so far — putting $582 million earmarked for consumers and program administration at risk.

California had issued its first rebate check to consumers in February, according to the state’s Energy Commission.
“Many states were just getting started on their programs, and suddenly they’re tossed into turmoil,” said Lowell Ungar, director of federal policy at the American Council for an Energy-Efficient Economy.

The programs in question, Home Energy Rebates, were created through the Inflation Reduction Act. President Biden signed it into law in 2022.
The law allocated up to $8.8 billion of federal funds for states, territories and the District of Columbia to disburse to consumers in the form of rebates.
Consumers were provided up to $8,000 of Home Efficiency Rebates and up to $14,000 of Home Electrification and Appliance Rebates, per federal law. Maximum amounts vary per household, depending on factors like income eligibility.

The rebates aim to reduce the cost of home upgrades like installing insulation and heat pumps or buying efficient appliances like electric stoves — with an eye to also reducing consumers’ energy bills and cutting planet-warming carbon emissions.
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All states except South Dakota had applied for the federal funds. The U.S. Department of Energy approved those applications, and states were in various phases of rollout by the end of the Biden administration.
However, the Trump administration on Jan. 27 put a freeze on the disbursement of federal funds that conflict with the president’s agenda, including initiatives related to green energy and climate change.
The fate of that freeze is up in the air as courts weigh legal challenges to the policy.
The U.S. Department of Energy didn’t return a request from CNBC for comment.
The California Energy Commission — which had launched an $80 million first phase of its home energy rebate program in the fall — paused its program on Feb. 25, according to a California Energy Commission website.
The pause will remain in place “until the Trump Administration provides additional information on the funding,” Commission staff wrote in an e-mailed statement.
California was approved for the second-largest tranche of funding for the energy rebate programs, behind only Texas. (The U.S. Energy Department awarded $689 million to Texas, according to an archived federal website.)
The Texas State Energy Conservation Office didn’t return a request for comment on the status of its program.

Since Jan. 31, California hasn’t been able to successfully draw down funds for administrative costs to run its rebate program, according to a California Energy Commission website. The U.S. Energy Department has also removed information about Home Energy Rebate programs from its website, the CEC said.
Not all states have paused their programs, however.
For example, officials in Maine and North Carolina recently confirmed to CNBC that funding through their rebate programs remains available — for now.
The North Carolina Department of Environmental Quality is “closely watching any federal actions that may change the operations of the Energy Saver NC program,” a spokesperson said in an e-mailed statement.
Different states may have “different risk tolerances” when it comes to administering these programs and issuing rebates when it’s unclear if they’ll eventually be reimbursed, Ungar said. More

It is a fabulous time to be a gold bug. Not long ago, outing yourself as one was a good way of getting people to back away from you at an investment conference. The popular image was of someone in possession of their own electricity generator, stacks of water-purification tablets and several years’ supply of tinned food. Now it just features a shrewd investor. Since the start of 2023 the shiniest asset’s price has soared by nearly 60% in dollars. That is more than any of the world’s leading share indices—including, after a turbulent couple of weeks, America’s S&P 500. More

China on Wednesday increased its defense spending by 7.2% this year, the same growth rate as in the prior two years, as Beijing seeks to “firmly safeguard” its national security.
The increased defense budget, well above China’s economic growth target for this year of roughly 5%, comes as Western governments seek to ratchet up military spending to bolster their own security.
The European Union announced Tuesday that it could mobilize as much as 800 billion euros ($841 billion) to shore up support for Ukraine amid Russia’s full-scale invasion.

China’s navy showed off its J-15T fighter jet at the 2024 Zhuhai Air Show on Nov. 12, 2024.
Nurphoto | Nurphoto | Getty Images

China on Wednesday increased its defense spending by 7.2% this year, the same growth rate as in the prior two years, as Beijing seeks to “firmly safeguard” its national security.
In an official government report due to be released in parliament, China proposed a national defense budget of 1.78 trillion yuan ($244.99 billion) for the 2025 fiscal year.

The increased defense budget, well above China’s economic growth target for this year of roughly 5%, comes as Western governments seek to ratchet up military spending to bolster their own security.
The European Union announced Tuesday that it could mobilize as much as 800 billion euros ($841 billion) to shore up support for Ukraine amid Russia’s full-scale invasion. The move followed reports that the U.S. had abruptly paused military aid to Ukraine.
China budgeted a 7.2% increase in defense spending to 1.67 trillion yuan last year, the same growth rate as in the prior year. Beijing had increased spending by 7.1% in 2022 and 6.8% in 2021, according to official data.
When asked on Tuesday about China’s defense spending, Lou Qinjian, spokesperson for the third session of the 14th National People’s Congress, told reporters that “peace needs to be safeguarded with strength.”
That’s according to an official translation of his Mandarin-language remarks.

China’s defense expenditure as share of GDP has been held under 1.5% for many years, Lou said, adding that this rate of spending is lower than the global average.
China remains the world’s second largest military spender behind the U.S. which has set the military budget for 2025 at $850 billion.
Separately, expenditures earmarked for public security this year was raised by 7.3%, the official statement showed, a sharp increase compared with the 1.4% rise last year.
— CNBC’s Sam Meredith contributed to this report. More