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In a recent report, People’s Bank of China Governor Pan Gongsheng articulated China’s strategies for nurturing a sustained economic recovery and mitigating financial risks. The report, notable for being the governor’s first policy commentary since the release of third-quarter economic data, outlines the nation’s immediate priorities and was presented to the country’s parliament.
Key points from the report include:
- Precise and Forceful Policies: The central bank will adopt more precise and assertive policies to stimulate economic growth.
- Reduced Lending Rates: Financial institutions will be guided to lower real lending rates, thus reducing financing costs for both businesses and individuals.
- Market Activation: Efforts will be made to invigorate capital markets and boost investor confidence.
- Adaptive Macroeconomic Policies: The central bank is prepared to adjust macroeconomic policies in response to evolving economic conditions. This adaptability will help strengthen financial supervision.
- Focus on Domestic Demand: One of the central objectives is to expand domestic demand, bolstering confidence in the economy.
- Yuan Stability: The country is committed to maintaining the stability of its currency, the yuan, and preventing abnormal fluctuations in cross-border fund flows and foreign exchange markets.
- Yuan Internationalization: China will continue its efforts to internationalize the yuan, establish a risk warning and control system for overseas investments, and safeguard its foreign currency assets.
- Addressing Local Government Debt Risks: Financial institutions will be guided to assist in resolving local government debt risks, including those related to local government financing vehicles.
- Resolving Real Estate Bonds: Steps will be taken to manage default risks associated with bonds issued by major real estate enterprises, thereby preventing risk contagion in financial markets.
The report reflects China’s commitment to fostering economic growth and stability while proactively managing potential risks in its financial sector.
