Robust economy resilient to trade attacks

The United States pulled the trigger on 25 percent tariff on $34 billion worth of Chinese imports on Friday, launching a full-scale trade war. And given the ominous signs visible on the global trade firmament, China would do well to prepare to deal with possibly the largest and dirtiest trade war in history.

Indeed, the People's Bank of China, the country's central bank, didn't follow the US Federal Reserve's decision to raise the interest rate. Instead, it opted for targeted raising of the reserve ratio to free up liquidity for the market, reflecting China's independent monetary policy.

The executive meeting of the State Council, China's Cabinet, on June 20 advocated that banks provide loans for small and micro-sized businesses by cutting the required reserve ratio, which triggered market speculation over an interest rate hike. But on Thursday, the PBOC lowered the reserve ratio for commercial banks by 0.5 percentage points, which will release 700 billion yuan ($107 billion) to support debt-for-equity swaps and help small and micro-sized businesses to solve their financing problem.