On December 30, 2021, the People’s Bank of China (PBC) held a press conference on financial services for micro and small businesses (MSBs) and green finance. Wang Xin, Director-General of the Research Bureau, Sun Guofeng, Director-General of the Monetary Policy Department, Zou Lan, Director-General of the Financial Market Department, Yan Fang, Deputy Director-General of the Payment and Settlement Department, and Zhang Zihong, Director-General of the Credit Reference Center (CCRC) attended the conference and answered questions from the press. Luo Yanfeng, Deputy Director-General of the General Administration Department and PBC spokesperson, presided over the press conference. The transcript is as follows:

Luo Yanfeng: Good morning, friends from the press. Welcome to today’s press conference on financial services for MSBs and green finance.

Financial supports for MSBs and green development have been top priorities for the PBC in recent years. In 2021, the PBC achieved satisfactory results in elevating the quality and efficiency of financial services for the real economy and in improving the business environment for enterprises by using structural monetary policy tools creatively and implementing supportive financial service measures while keeping the aggregate money and credit adequate at a reasonable level.

The Central Economic Work Conference requires that the economic work in 2022 should prioritize stability while pursuing progress. The sound monetary policy should be flexible and appropriate with the liquidity remaining adequate at a reasonable level. Financial institutions should be guided to increase their support for the real economy, especially for MSBs, sci-tech innovation and green development. The PBC will earnestly implement the guiding principles of the Central Economic Work Conference and push ahead with relevant work.

We arranged this press conference for you to better understand the PBC’s efforts in supporting MSBs and green development. Let’s first welcome Director-General Wang Xin to give us a brief introduction.

Wang Xin: Good morning, friends from the press. I am glad to have this opportunity to share with you the development of green finance.

China is a forerunner in developing a green finance system. It played a significant role in supporting low-carbon transformation. This year, in particular, has witnessed major breakthroughs in green finance with respect to standard setting, incentive policies and international cooperation. The achievements contributed to reaching the goals of peaking carbon emissions and achieving carbon neutrality.

First, we have sped up the building of a green finance standard system that is “unified domestically, aligned with international standards, and clear and executable”, and important progress has been made. The PBC conducted the first round of opinion solicitation for the national standard of Green Finance Terminology, and released two industry standards, namely the Guidelines on Environmental Information Disclosure for Financial Institutions and Environmental Equity Financing Tools. We also submitted three industry standards for approval, and initiated one industry standard for drafting. In April this year, the PBC, together with the National Development and Reform Commission (NDRC) and the China Securities Regulatory Commission (CSRC), issued the Green Bond Endorsed Projects Catalogue (2021 Edition), unifying the standards for domestic green bonds.

Second, we have strengthened the requirements for environmental information disclosure and financial regulation. The PBC guided financial institutions located in the pilot zones for green finance reform and innovations in preparing environmental information disclosure reports and in experimenting carbon accounting. The practice will be applied nationwide in due time. The PBC also organized some commercial banks to carry out stress tests for climate-related risks.

Third, we have further improved the incentive and restraint mechanism. The PBC launched the carbon emission reduction facility (CERF) and special central bank lending in support of clean and efficient coal use, aiming to guide financial institutions to increase their support for green and low-carbon projects. We revised and issued the Green Finance Assessment Program for Banking Institutions, which expanded the scope of quantitative assessment to have green loans and bonds covered, and leaves space for green wealth management, green trust and other related businesses.

Fourth, we have diversified green finance products and enhanced the market system. By the end of Q3 2021, the outstanding green loans in China approached RMB15 trillion, and the outstanding green bonds exceeded RMB1 trillion, ranking among the top worldwide. With the launch of new financial products such as carbon neutrality bonds and sustainability-linked bonds, the financial services have become better targeted towards the goal of carbon emissions reduction.

Fifth, we have further deepened international cooperation in green finance. China is an active advocate and practitioner in the global response to climate change. This year, the PBC, as the co-chair of the G20 Sustainable Finance Working Group (SFWG), took the lead in drafting the G20 Sustainable Finance Roadmap and the G20 Sustainable Finance Synthesis Report, which focused on harmonizing approaches and instruments such as taxonomies and aimed at strengthening sustainability information disclosure and reporting. These two reports have been approved by G20 Finance Ministers and Central Bank Governors Meeting.

Looking forward, the financial sector will be more proactive and focus on the following tasks. First, it will improve the top-level design, guide and channel more funds to support carbon emissions reduction, and promote an all-round green and low-carbon transition in energy structure, industrial structure, production and lifestyle. Second, it will push forward standard development and improve the standards for green finance and transition finance. Third, it will strengthen information disclosure, practice carbon accounting in financial institutions, and advance the stress tests of climate-related risks. Fourth, it will improve incentives and constraints and enhance the internal impetus of the financial sector in supporting green and low-carbon development. Fifth, it will enable the national carbon trading market to play a better role in pricing, aiming at carbon emissions reduction in a more market-oriented way.

This is my introduction, and I look forward to exchanging views with you later. Thank you.

Luo Yanfeng: Now let’s welcome Director-General Sun Guofeng to give us a brief introduction.

Sun Guofeng: Thank you. Since 2021, according to the arrangements and decisions of the CPC Central Committee and the State Council, the PBC has implemented a sound monetary policy which is flexible, targeted, reasonable and appropriate while focusing on domestic conditions and prioritizing stability. The monetary policy has been more forward-looking, precise and effective, and it stepped up the financial support for the real economy.

First, the liquidity has remained adequate at a reasonable level. We injected liquidity by using a mix of monetary policy instruments. In July and December 2021, we cut the required reserve ratio (RRR) by 0.5 percentage points respectively, releasing a total of RMB2.2 trillion long-term funds. We held two meetings with financial institutions to analyze money and credit situations, guiding them to boost the stability of credit growth. In the first 11 months of 2021, new loans reached RMB18.8 trillion, RMB438.4 billion more than the increase in the same period a year earlier. At the end of November, the M2 grew by 8.5 percent, and the aggregate financing to the real economy (AFRE) grew by 10.1 percent, basically in line with the nominal GDP growth.

Second, the overall financing costs for businesses has remained stable with a slight decline. With the continuous efforts to unleash the potential of the loan prime rate (LPR) reform, the one-year LPR fell by 5 basis points to 3.8 percent in December. The regulation of deposit rates was improved. Now the self-regulatory ceiling for deposit rates is determined by adding a few basis points to the benchmark, no longer an upward adjustment. The change brought down the costs of bank liabilities. The interest rate on central bank lending for rural development and MSBs was lowered by 0.25 percentage points to enhance support for agriculture, rural areas and rural people, as well as MSBs. The market-oriented interest rate formation and transmission mechanism was improved and it proved to be a strong force in reducing the overall financing costs for businesses. From January to November 2021, the interest rate on corporate loans was 4.61 percent, a year-on-year decrease of 0.11 percentage points. In November, the rate was 4.54 percent, the lowest on record.

Third, we have boosted support for key areas and weak links in the national economy. At the beginning of 2021, the PBC added RMB200 billion quota to its central bank lending to guide locally incorporated banks in regions with slow credit growth to increase credit supply. In March, according to the arrangements of the State Council executive meetings, the two monetary policy instruments that provide direct support for the real economy was extended till the end of 2021. In September, an additional RMB300 billion central bank lending for MSBs was offered to support locally incorporated banks to increase loans to MSBs and self-employed businesses. In November, the PBC launched the CERF and RMB200 billion special central bank lending to support the clean and efficient coal use. These structural tools contributed to stabilizing the aggregate money and credit. At the end of November, the outstanding inclusive MSB loans registered RMB18.9 trillion, up 26.4 percent year on year. In November, the weighted average interest rate on inclusive MSB loans was 4.98 percent, down 0.1 percentage points from December 2020. At the end of November, 43 million MSB entities benefited from the inclusive MSB loans, a year-on-year increase of 35 percent. Hence, inclusive MSB loans have witnessed volume increase, coverage expansion and price reduction.

In 2022, we will follow the guiding principles of the Central Economic Work Conference, prioritize stability while pursuing progress, and keep the sound monetary policy flexible and appropriate. Giving full play to the dual functions of monetary policy instruments in terms of aggregate and structure, we will work more proactively to increase support for the real economy and keep liquidity adequate at a reasonable level. We will strengthen the stability of aggregate credit growth and keep the growths of M2 and AFRE generally in line with nominal GDP growth. We will accurately apply structural monetary policy tools for increasing the supply and guide financial institutions to step up their support for MSBs, scientific and technological innovation and green development. According to the arrangements of the State Council executive meetings, next year, the PBC will ensure successful transformation of the two monetary instruments that provide direct support for the real economy, where the instrument supporting deferred repayments on inclusive MSB loans will be converted to the instrument supporting inclusive MSB loans from the beginning of 2022 to end-June 2023. The support plan for unsecured inclusive MSB loans will be incorporated into central bank lending to support rural development and MSBs from the beginning of 2022. The PBC will make best of the CERF and special central bank lending that support the clean and efficient use of coal, and introduce comprehensive policies to support coordinated regional development. We believe that by implementing these policies and measures, the monetary policy will render stronger support for key areas and weak links of the national economy, such as MSBs and green development, with continuous effects. Thank you.

Luo Yanfeng: Next, let’s welcome Director-General Zou Lan to give a briefing.

Zou Lan: I would like to introduce the overall financial support for micro, small and medium-sized enterprises (MSMEs). Just now, Director-General Sun highlighted the financing of MSBs in his introduction, and I’m going to add a few points.

Since the beginning of this year, the PBC has earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council. We have worked with relevant authorities to carry out the policies issued, and we timely assessed the economic situations and planned new financial support measures to support MSMEs and self-employed businesses.

First, we comprehensively adopted a mix of policies such as the RRR cuts, central bank lending and central bank discount to maintain reasonably adequate liquidity and foster a favorable monetary and financial environment for the financing of MSMEs. We continued to implement the two monetary policy instruments directly supporting the real economy and eased the funding pressure on MSMEs.

Second, we carried out the project for enhancing the capacity to provide financial services for MSMEs, urged banks to optimize their internal resource allocation and appraisal and incentive mechanisms, with enhanced technological applications, increased the support for first-time loans, loan renewals and unsecured loans, and promoted voluntary credit-granting and the borrow-and-repay-as-you-go lending model to better meet the financing needs of MSMEs.

Third, MSME financing became more convenient. The PBC established and improved the policy framework and infrastructure for supply chain financing, built a platform for supply chain bills, promoted the CRC Receivables Financing Service Platform, and improved the circulation efficiency of accounts receivable for MSMEs. From January to November, the platform supported 23,000 MSMEs to finance with RMB1.8 trillion of accounts receivable.

Fourth, the PBC continued to leverage the synergy among authorities of fiscal affairs, industry and information technology, and market regulation, and strengthen the credit risk sharing and compensation mechanism and the credit information sharing mechanism.

Overall, since the beginning of this year, the liquidity of banking system has been adequate at a reasonable level, and financial service capacity continuously improved. MSB financing maintained the trend of “increased volume, expanded coverage, lowered price and optimized structure.”

Adding to the aggregate and financing costs as introduced by Director-General Sun, I have another two points to make.

First, in terms of coverage, the inclusive MSB loans have supported 43.04 million MSB entities, registering a year-on-year increase of 35 percent, 15.6 percentage points higher than that at end-2020. Second, in terms of structure, the proportion of unsecured loans has been rising. At end-November, unsecured loans accounted for 17.8 percent of the inclusive MSB loans, 2.4 percentage points higher than that at end-2020. The support has been growing for enterprises with specialized, skilled, unique, and innovation-driven characteristics. At end-November, the proportion of such “small giants” enterprises that obtained loans was 71.8 percent, and the outstanding loans per enterprise reached RMB76.2 million.

Next, the PBC will strengthen inter-departmental cooperation, continue to implement the relief and support policies, accelerate improving the long-lasting mechanism for promoting the confidence, willingness, ability, and professionalism of banks in issuing loans, optimize the financing environment for MSMEs, and support the development of MSMEs and self-employed businesses. Thank you.

Luo Yanfeng: Next, let’s give the floor to Deputy Director-General Yan Fang.

Yan Fang: Director-General Sun and Director-General Zou have just explained the comprehensive measures of the PBC to support MSBs. I would like to introduce the account services for MSBs from the perspective of payment and settlement.

The CPC Central Committee and the State Council have always attached great importance to the account services for MSBs. Resolutely implementing the arrangements of the CPC Central Committee and the State Council and adhering to the concept of “payment for the people,” the PBC guided commercial banks to optimize the account services for MSBs in a way that “keeps account opening as easy as before and risk prevention and control as strong as before, and enhances the corporate account services optimization and account management”.

With the joint efforts of all parties, the account opening process for MSBs has been optimized, with remarkably more new accounts and much shortened time to open an account. In the first 11 months of 2021, 12.75 million corporate accounts (including self-employed businesses) were opened, a year-on-year increase of 22.3 percent. The account opening ratio of newly established businesses (the number of businesses with new accounts opened ÷ the number of registered businesses) was 79.3 percent, up 6.2 percentage points year on year. The time for opening an account was reduced to 1-3 days, an average reduction of 60 percent compared to the same period last year.

To achieve this, the PBC has guided commercial banks in six respects:

First, we strengthened top-level design. We issued the Guiding Opinions on Optimizing Bank Account Services and Risk Prevention and Control for MSBs, which puts forward 18 measures including simplified account opening and account management by category, to guide commercial banks to reasonably control the accounts’ functions by simplifying the requirements of supplementary materials for account opening, so as to align the customer risk level with the functions of the account, and thus ensure both convenient and safe account opening services. As of end-November, 114,000 bank outlets in China have provided simplified account opening services.

Second, we reinforced information disclosure. By guiding commercial banks to publicize the materials, expenses and time for account opening, as well as the negative list of account opening and the service oversight hotlines at three levels, namely the outlet itself, its supervising branch and corresponding sub-branch/branch of the PBC, we worked to improve service transparency, define service bottom lines and standards and accept public oversight. As of end-November, 165,000 bank outlets have publicized the negative list. We also welcome oversight from the media.

Third, the PBC promoted cooperation among departments and authorities. We worked with the market regulation authorities to facilitate account opening by sharing enterprise information and offering joint services. As of end-November, 214 commercial banks have verified 39.62 million industrial and commercial registration through the enterprise information network verification system, 70,600 bank outlets have connected with the local single-portal platform for administrative affairs, which enables businesses to register and open accounts at the same time, and 451,600 businesses have used electronic business licenses and electronic seals to open accounts.

Fourth, we reduced service fees. The PBC put forward 12 measures to lower fees and waiver profits concerning bank account services and RMB settlement. At end-November, commercial banks, payment institutions and clearing institutions waivered about RMB5.45 billion in favor of the real economy, benefiting more than 73 million market entities, of which commercial banks reduced the expenses of account opening for MSBs by RMB1.62 billion.

Fifth, we improved risk prevention and control in a more targeted way. The PBC guided commercial banks to improve their capacity of countering fraud and gambling as well as the monitoring and control of relevant funds, which strongly secured the launch of convenience-improving measures.

Sixth, we ensured that responsible parties were truly accountable. We ensured that commercial banks assume primary responsibilities while the PBC branches and sub-branches undertake responsibilities within their jurisdictions. We regularly carried out secret inquiries where division heads go through formalities. We regularly monitored and analyzed the number of accounts opened, and established a long-lasting mechanism for service supervision to ensure the effectiveness of various measures.

In addition, the PBC issued the Guiding Opinions on Providing Personal Bank Account Services for Mobile Employment Groups, guiding commercial banks to facilitate the opening of salary cards for college graduates and migrant workers, and provide financial services for MSB startups and self-employment.

Next, the PBC will resolutely implement the guiding principles of the sixth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference. We will play our part in countering fraud and gambling and optimizing account services following the arrangements of the CPC Central Committee and the State Council, ensure timely and specific implementation of the issued guiding opinions, and improve the sense of gain and satisfaction of MSBs in receiving corporate account services. Thank you.

Luo Yanfeng: Next, let’s welcome Director-General Zhang Zihong from the Credit Reference Center (CCRC).

Zhang Zihong: Dear friends from the press, good morning. Throughout 2021, the CCRC has earnestly implemented the Decision of the State Council on the Implementation of Unified Registration of Security Interests Over Movable Properties and Rights, earnestly implemented the national unified registration of security interests over movable properties and rights under the guidance of the PBC, and ensured the safe and steady operation of the unified registration and publicity system of movable property financing. We have played a positive role in increasing the volume and expanding the coverage of the financing businesses of movable properties of MSMEs by providing efficient and convenient registration services, which improves the availability of financing for MSMEs, and promotes the innovation-driven development of green finance.

First, we have comprehensively upgraded the unified registration system and ensured its smooth operation, which effectively improved financing services for MSMEs. On one hand, the unified registration system operates smoothly, with a total of nearly 14 million registration entries, of which more than 90 percent of the registered security interest providers are MSMEs. As of end-November this year, the system boasts 69,000 users, 13.55 million registration entries and 109 million inquiries. From January to November this year, 4.93 million transactions were registered in the system, an increase of 71 percent over the same period last year. On average, 19,000 transactions were registered daily and 90,000 inquiries were recorded daily on workdays. Among all kinds of security interests over movable properties and rights, the security interest providers of 12.85 million registrations were MSMEs, accounting for 95 percent of the total. The system has provided services for 5.64 million MSMEs.

In addition, the unified registration has facilitated the effective conversion of movables financing resources into mortgages and pledges, increased the availability of movables financing for MSMEs, and bolstered the willingness of financial institutions to lend to MSMEs. Among the seven categories of registration, financial leases increased by 43 percent year on year, and the pledge and transfer of accounts receivable increased by 52 percent year on year. The mortgages of production equipment, raw materials, semi-finished products and finished products, the retention of ownership, the pledge of certificates of deposit, warehouse receipts and bills of lading, and the pledge of other security interests over movable properties and rights increased significantly, accounting for over 16 percent of the total. Financial institutions have actively engaged in financing businesses pledged by movable properties. From January to November 2021, registrations filed by banks and other financial institutions stood at 1.71 million, accounting for 35 percent of the total, while those by financial leasing, factoring and guarantee companies amounted to 2.75 million, accounting for 56 percent of the total. The total registrations filed by the aforementioned institutions accounted for 91 percent of the total.

Second, we have released the Measures for the Unified Registration of Security Interests Over Movable Properties and Rights, which improves the service system in this area. To support the unified registration of securities interests over movable properties and rights, guide market participants to conduct registration and inquiry services in a regulated way, and help them effectively protect their rights and interests, we have cooperated with relevant departments of the PBC to amend the Measures for the Registration of the Pledge of Accounts Receivable and renamed it the Measures for the Unified Registration of Securities Interests over Movable Properties and Rights, which was released recently.

Third, following the requirements of the State Council on the pilot program for the business environment innovation, we have further optimized regular enterprise-related services. Movables financing is an effective means to address the lack of pledges and financing difficulties among MSMEs. To this end, we will continue to improve the unified registration system, ensure nationwide services for the unified registration of securities interests over movable properties and rights, safeguard the safe operation of the system, establish an efficient service system, and continuously improve the efficiency and quality of the services. Meanwhile, we will improve the system of financing guarantee, further optimize regular enterprise-related services, and promote financial product innovation, thereby enhancing the availability and convenience of MSME financing. Thank you.

Luo Yanfeng: That concludes the briefings of our five guests. Now it’s time for questions.

Shanghai Securities News: What is the consideration behind converting the two monetary policy instruments directly supporting the real economy into regular instruments? What are the PBC’s arrangements in this regard? How many new loans will be issued after the conversion? What are the effects on the MSB financing?

 

Sun Guofeng: Thank you for your question. To start with, since their inception, the two monetary policy tools have exerted effective economic leverage. They have provided the financial sector with positive incentives to support MSBs and self-employed businesses, greatly contributing to stabilizing businesses and securing employment. As of end-November 2021, through the instrument supporting deferred repayments on inclusive MSB loans, the PBC had offered RMB18.9 billion incentives, directly driving locally incorporated banks to defer repayments on RMB2 trillion inclusive MSB loans and mobilizing banking institutions nationwide to defer repayments on RMB15.1 trillion loans. Through the support plan for inclusive unsecured MSB loans, the PBC had provided RMB317.5 billion low-cost funds, directly driving locally incorporated banks and banking institutions nationwide to issue RMB879.4 billion and RMB9.6 trillion inclusive unsecured MSB loans respectively. Therefore, both tools have achieved remarkable outcomes.

MSBs, boasting a large number of businesses and spanning a wide range of sectors, constitute an important part of our national economy. They embody the vitality of the economy and are the main job creators. Considering the current downward pressure on China’s economy and the actual difficulties faced by MSBs, stepping up support of the financial sector for MSBs is conducive to stabilizing businesses, securing employment, and safeguarding the overall stability of the macro economy. The two tools that provide direct support for the real economy have been extended twice before. This time, we will take a market-based approach to their conversion, which may maintain and consolidate the support for the market entities and enhance the sustainability of financial support for market entities.

To be specific, the PBC will convert the instrument supporting deferred repayments on inclusive MSB loans into an instrument supporting inclusive MSB loans. From the beginning of 2022 to end-June 2023, for inclusive loans issued by locally incorporated banks to MSBs and self-employed businesses, the PBC will provide funds in the amount of one percent of their incremental balance of these loans, thus encouraging the increase of inclusive MSB loans. In addition, from the beginning of 2022, the support plan for inclusive unsecured MSB loans will be incorporated into central bank lending to support rural development and MSBs. The quota of RMB400 billion of central bank lending originally set aside to back inclusive unsecured MSB loans could be used on a rolling basis, and could be increased further when necessary. On December 7, 2021, the PBC cut the interest rate of one-year central bank lending that supports rural development and MSBs by 0.25 percentage points to a more preferential level at 2 percent. From now on, eligible locally incorporated banks that issue inclusive unsecured MSB loans may apply to the PBC for central bank lending at a preferential rate. After the conversion, the market-based instruments will continue to play a guiding role in increasing the volume, lowering the rates and expanding the coverage of inclusive MSB loans. With the smooth conversion of the two policy tools, financial institutions may negotiate with their customers the renewal of loans at maturity in a market-based approach and in the meantime identify new financing demand. In this sense, the conversion will guide financial institutions to expand financing for MSBs and self-employed businesses, enhance their sustainability of services, and encourage inclusive MSB loans to increase with lower rates and a wider coverage.

CNR Business Radio, China Media Group: Could you please elaborate on the additional measures to be adopted by the PBC in 2022 to support MSME financing?

 

Zou Lan: Thank you for your question.

Since last year, in response to the COVID-19, the PBC has followed the arrangements made by the CPC Central Committee and the State Council, targeted at both the long-term and short-term goals and address both the symptoms and root causes. We have continuously improved the policy system of financial support for MSMEs, increased the support for enterprises in the key sectors hit by the pandemic, effectively alleviated the financing difficulties faced by MSMEs, and promoted the development of market entities. At present, however, China’s economic development is confronted with triple pressures, namely demand contraction, supply shocks, and weakening expectations. With sporadic COVID-19 cases reported in multiple places across China, the financial strain of MSMEs has intensified.

Going forward, we will follow the arrangements made by the CPC Central Committee and the State Council and focus on the real economy. We will press ahead with our work on the following aspects under the current policy framework:

First, we will make good use of a mix of monetary policy tools. We will ensure the smooth conversion of the two monetary policy tools that provide direct support for the real economy, effectively implement the support instruments for inclusive MSB loans, increase the issuance of loans to MSBs and self-employed businesses, and continue to increase first-time loans, loan renewals and unsecured loans.

Second, we will carry out the project of enhancing the capacity to provide financial services for MSMEs. More specifically, we will urge financial institutions to optimize their internal policy arrangements, intensify Fintech empowerment, enhance the capacities of customer identification, credit evaluation, loan pricing and risk management, and improve the internal identification criteria and procedures for ensuring that those who have fulfilled their duties in loan issuance are not held accountable. In addition, we will support financial institutions to issue special financial bonds for MSBs.

Third, we will increase the availability of supply chain financing for MSMEs. In recent years, there have been many reports regarding the prominent problems with accounts receivable and advance payments of MSBs. Appropriate commercial credit, which is normal in economic activities, reflects long-term cooperation and mutual trust between enterprises. However, above certain limits, it could turn into trouble and considerably impact the profitability and liquidity of MSBs.

To address the problem, we will focus on the following. First, we will support relevant authorities in carrying on the campaign aimed at rectifying overdue payments owed to small and medium-sized enterprises (SMEs) in order to protect the rights and interests of MSMEs. Second, we will leverage on the Supply Chain Commercial Paper Platform, the CRC Receivables Financing Service Platform and the Unified Registration and Publication System for Movables Financing to further facilitate MSME financing. In other words, given that outstanding funds are normal within appropriate limits and that to solve the problem takes time, we will prioritize the development of receivables financing to minimize the impact of outstanding funds on the liquidity of SMEs and the survival of MSBs. Meanwhile, we will move ahead with innovations of supply chain finance in accordance with relevant regulations to cope with the collateral shortage faced by MSMEs. Against the backdrop of sci-tech development, we need to better leverage the positive role of data in commercial credit and financial credit activities to create a multi-win situation for enterprises along the supply chain, whether they are big enterprises, small businesses, financial enterprises or sci-tech services companies, thereby improving the overall efficiency and quality of the economic cycle.

Fourth, we will push for the improvement of supporting mechanisms for MSME financing. We will work to enhance the connection between the government, banks and enterprises by building a regular, convenient and network-based liaison mechanism while expanding the coverage of MSME credit information sharing to improve the efficiency and targetedness of services. We will give better play to government-backed financing guarantee institutions and increase subsidies and rewards for MSME loans to promote credit enhancement and risk diversification for MSME financing. While there are high expectations on government-backed financing guarantee institutions, some of them are found to record relatively low repayment ratios and limited coverage. On the one hand, this is a reflection of their prudent operation and risk awareness, which are good for maintaining business sustainability. On the other hand, low compensation ratios and small coverage relative to the banking system indicate a lot of room for improvement. These institutions are yet to play a bigger role in improving MSB financing in the future. We will continue to work with relevant authorities in this regard. Thank you.

China Securities Journal: This year, the PBC issued the Plan for the Assessment of Green Finance Businesses of Banking Institutions. How is it getting on? What will be the focus of work in the coming days?

 

Wang Xin: Thank you for your question. To promote green and low-carbon transition and reach the aims of peaking carbon emissions and achieving carbon neutrality requires the joint efforts of all parties concerned. In the process, financial institutions have a major role to play. Therefore, more incentives as well as constraints need to be introduced. An important approach is to conduct effective assessment of green finance businesses of financial institutions. In July 2018, with the release of the assessment plan, the PBC launched the assessment of financial institutions across the country in terms of their performance in extending green credit. As indirect financing is predominant in China’s financial system, green credit has been the most important green finance instrument, currently accounting for 90 percent of all the green finance products. That explains the fundamental importance of conducting green credit assessment. In addition, with the development of the green finance market and various green products, assessment of green finance businesses of financial institutions needs to be done more comprehensively and properly. Therefore, since May 2021, we have expanded the scope of green finance assessment to include the green bond business and have incorporated the assessment results into central bank ratings of financial institutions. So far, assessment of the green bond business has proved to be quite effective as investors have become more inclined to purchase green bonds. Given their relatively low interest rates, green bonds will also help reduce financing costs.

Going forward, the PBC will work with relevant authorities to improve green finance assessment of financial institutions mainly in the following three aspects. First, we will further improve the quality of data and work for the establishment of an open, transparent, authoritative and unified statistics and publication mechanism for green finance. Only with more accurate and comprehensive data, can we conduct assessment in a more accurate and effective way. Second, we will further expand the scope of assessment by incorporating more types of green finance products and services into the assessment system in due course. Third, we will expand the scenarios for the application of the assessment results to boost the influence of the assessment. What we plan to do is to link the assessment results with some regulatory measures, monetary policy tools, etc. in order to enhance the incentives for financial institutions to engage in green finance businesses and promote their development. Thank you.

CCTV News, China Media Group: How is the effect of unified registration for security interests over movable properties and rights since it was launched?

 

Zhang Zihong: Thank you for your question. Since its launch on January 1, 2021, the unified registration system has been operating smoothly and well received by the market. It has solved problems such as the difficulties with rights confirmation in movables financing and the lack of efficiency in registration and inquiry processes. So financial institutions have become better motivated to engage in movables financing and the availability of MSME financing has been improved. In this sense, it is conducive to increasing the amount and expanding the coverage of MSME financing and enhancing the service capacity of banks.

The main achievements are the following. First, registration and inquiry regarding the security interests of movables have witnessed streamlined processes and much higher efficiency. Unified registration has made it possible to register or inquire about the security interests of movables and rights all at one stop. On the online platform of the unified registration and publication system for movables financing, one can go through online registration processes by himself, with the registration coming into effect immediately instead of being subject to review by a registry agency. Similarly, one can make inquiries with one click by simply entering the name of the security provider. Second, with the introduction of unified registration for the security interests of movables and rights, unified, explicit and predictable rules on priority have been established and effectively boosted the confidence of financial institutions to issue loans. Based on the time of publication, financial institutions will clearly know their order of priority as security interest holders. Feeling more assured of their rights, they are much more willing to lend. According to the registration data, from January to November 2021, around 3,000 financial institutions newly became users of the unified registration system, exceeding 30 percent of the total number of financial institution users before the launch of unified registration, or 3.5 times that recorded in the same period a year ago. An increasing number of local financial institutions, such as city commercial banks, rural commercial banks and village and township banks, have started the businesses of movables financing. From January to November 2021, local financial institutions newly taking part accounted for 50 percent of the total number of financial institutions, rising by 15 percent from the period before unified registration was introduced. Third, as movables that can be pledged have been expanded and financial institutions have continued to innovate financial products, financing has become more available to MSMEs. Unified registration, which makes it easier for financial institutions to inquire about the security interests of movables and rights, can effectively reduce and rein in credit risks and costs so as to better protect the interests of the security interest holders. More and more financial institutions have been actively exploring innovative and sustainable financial products and service models while encouraging local MSMEs, farmers, herdsmen and self-employed traders to get financing by pledging acceptable movables of their own. As the registration data shows, of all the registrations recorded from January to November 2021, 4.8 million, or 97 percent had MSMEs as security providers, up 70 percent year on year; and the unified registration system offered services to 2.76 million MSMEs, up 57 percent year on year. Movables and rights that can be used as security interests are increasingly diversified, of which newly accepted in many parts of the country are livestock such as pigs, cows, sheep and poultry, crops such as corn and rice, right to expected income from crop yields, right to management of livestock farms, right to management of rural homestays, and carbon emissions allowances.

China News Service: Why is it that MSBs often have trouble opening bank accounts? What will the PBC do to tackle the root cause of the problem?

 

Yan Fang: Thank you for your question. This is an old problem coupled with new concerns. As far as commercial banks are concerned, bank account services are the basis of all financial services, so it is reasonable and necessary that they carry out customer due diligence in accordance with anti-money laundering laws and regulations. Furthermore, as shown by recent reports from the police, illegal activities committed via corporate bank accounts are rampant, such as transferring gambling or fraud related funds and leasing, loaning, buying or selling bank accounts for profit. From January 2020 to November 2021, as many as 58,500 corporate bank accounts were involved in telecom fraud. Information from the police shows that many of them are bank accounts of Internet start-up MSBs, which don’t have fixed business premises, office materials or personnel. As a result, commercial banks have strengthened reviews of account opening applications from such MSBs. That said, however, compared with serving large and medium-sized enterprises, commercial banks tend to be less motivated to offer services to MSBs. In addition, without a clear understanding of the links between ex-ante, interim and ex-post responsibilities, some commercial banks place risk identification duties solely on the front office. This phenomenon, coupled with a lack of abilities to analyze external data, has led to “derisking” at the outlets of commercial banks. All these factors have contributed to the difficulties in account opening for MSBs.

To deal with the problem, the PBC has made coordinated efforts to optimize bank account services and prevent relevant risks, placing equal emphasis on both. With the implementation of a mix of measures, effects have started to show as expected. First and foremost among these measures is to put in place institutional arrangements for simplifying account opening procedures and carrying out classified and tiered account management. Accounts will be opened for a MSB that has its business license and its legal person’s identity card, unless the commercial bank has sound reasons to suspect that the MSB is engaged in illegal activities. At the same time, however, the commercial bank will reach agreement with the MSB on reasonable restrictions regarding account functions, uses, verification means, etc. in order to ensure that they match the risk profile of the MSB. Moreover, the accounts will be marked and commercial banks will strengthen ex-post due diligence and monitoring of transactions accordingly so as to strike a balance between facilitation of account opening and risk prevention. Second, we have required commercial banks to post public notices about the submissions, time length and fees for account opening, as well as the negative list and the supervision hotline in order to set bottom lines for their services. For instance, if a MSB is yet to start business and doesn’t have fixed business premises, commercial banks cannot press them for relevant submissions. Third, commercial banks have strengthened cooperation with the police. It is important that abnormal account opening applications be reviewed with police aid. Support from the police is also necessary to protect bank outlets from trouble-makers and encourage them to reject abnormal account opening.

Overall, to improve bank account services and prevent relevant risks is an arduous and complicated long-term undertaking. How to strike a balance in between remains an important subject for the PBC and commercial banks. We will move on. There has been some notable progress. We welcome supervision from the public.

Market News International: This year, unsecured loans grew at a lower pace and corporate credit demand remained insufficient. So, will the PBC introduce stronger policies for monetary aggregates next year? How will that influence the credit demand?

 

Sun Guofeng: Thanks for your question. The PBC has been focusing on domestic conditions and prioritizing stability throughout 2021. We effectively implemented sound monetary policy, and further intensified inter-temporal adjustment by lowering the RRR twice by 0.5 percentage points each time, releasing RMB2.2 trillion of long-term liquidity. We held two symposiums to analyze money and credit developments with financial institutions, guiding financial institutions to enhance the stability of aggregate credit growth. We continued to unleash the potential of LPR reform, and improved regulation on deposit interest rates. The LPR moved down by 5 basis points and the interest rates of central bank lending for rural development and MSBs were cut by 0.25 percentage points, so as to vigorously reduce the overall financing costs of businesses. Meanwhile, we introduced central lending of a new quota of RMB200 billion and of RMB300 billion to support regions with slow credit growth and for MSBs respectively, launched the Carbon Emission Reduction Facility (CERF), introduced the special central bank lending for the clean and efficient use of coals, and transformed the two monetary instruments with direct support to the real economy into market-oriented instruments in support of MSBs. These structural monetary policy instruments contributed to the optimization of credit structure and helped enhance the stability of aggregate credit growth.

In general, the monetary policies were implemented to meet the requirement of being flexible, targeted, adaptive and appropriate to keep liquidity adequate at a reasonable level, with M2 and AFRE maintaining reasonable growth and financial sector delivering solid support for the real economy. In the first 11 months of 2021, new loans issued by financial institutions reached RMB18.8 trillion, surpassing that in the same period last year by RMB438.4 billion. At end-November, the growth rates of M2 and AFRE registered 8.5 percent and 10.1 percent respectively, basically in line with nominal GDP growth.

In 2022, the PBC will fully implement the guiding principles of the Central Economic Work Conference, carefully ensure three “stabilities”, and further strengthen the capabilities of the financial sector in serving the real economy.

First, we will maintain the stable growth of aggregate money and credit. We will use a mix of monetary policy instruments to keep the growth of M2 and AFRE generally in line with nominal GDP growth.

Second, we will steadily optimize the financial structure. We will adopt targeted measures to guide financial institutions to increase support for the real economy, especially MSBs, technological innovation, and green development, with monetary policy instruments playing their roles in adjusting both the aggregate and the structure, and thus bolster high-quality economic development.

Third, we will keep overall financing costs steadily drop. We will improve the market-oriented interest rate formation and transmission mechanism, leverage the progress achieved in the LPR reform, and keep the overall financing costs for businesses stable with a small decline. Thank you.

Financial News: Director-General Wang just mentioned the newly released Green Bond Endorsed Projects Catalogue (2021 Edition). Would you please further elaborate on this? Thank you.

 

Wang Xin: Thanks for your question. The Green Bond Endorsed Projects Catalogue is a very important document of a set of green finance standards. These standards are the fundamentals of system arrangements for green finance development. Everybody is talking about green. But what is green exactly? What kind of projects can be considered green projects? What kind of activities are green activities? What are the so-called brown projects with high carbon emissions? Lots debate remain there.

The PBC has attached great importance to the development and improvement of green finance standards and it has done lots of work along with relevant authorities. One of the most important progress we secured is to release the Green Bond Endorsed Projects Catalogue (2021 Edition) (the Catalogue 2021) in line with the universally adopted the “Do No Significant Harm (DNSH)” principle, thus unifying definitions for green bonds domestically. The Catalogue 2021 mainly focuses on addressing climate changes, i.e., carbon emissions reduction while taking into consideration the requirement on biodiversity protection. Also, according to Catalogue 2021, coal and other fossil energy projects are excluded from financial support, which facilitated the alignment with universally adopted standards and thus gained widespread recognition of the market and the international community. The Catalogue 2021 has effectively guided and regulated market entities, helped issue green bonds to raise medium and long-term funds, and supported green and low-carbon projects, etc. As of end-Q3 2021, outstanding green bonds in China grew 24.7 percent year on year to RMB1.02 trillion, up 5.8 percentage points compared with end-Q2.

Meanwhile, the Catalogue 2021 promoted the convergence of green taxonomies in China and the EU. Based on the Catalogue 2021 and the International Platform on Sustainable Finance (IPSF), the PBC and the EU Commission jointly completed the Common Ground Taxonomy (CGT). On the basis of the greatest common denominator of China’s and EU green taxonomies, CGT covers 55 major economic activities that substantially contributed to the mitigation of climate change with the recognition of both China and the EU. It lays an important foundations for supporting China-EU green finance cooperation, lowering the green certification cost for cross-border transactions, and mobilizing more overseas funds to support the goals of peaking carbon emissions and achieving carbon neutrality. The release of the CGT coincided with the holding of the UN Climate Change Conference (COP 26), and was well received by the society.

Looking forward, we will continue to promote the development and improvement of green finance standards.

Hong Kong Economic Herald: What have the PBC done to improve the guarantee system?

 

Zhang Zihong: Thanks for your question. The PBC acted in strict accordance with the Decision of the State Council on the Implementation of Unified Registration of the Security Interests of Movable Properties and Rights, and made solid efforts in building and maintaining the unified publicity system for movable property financing. We got off to a good start in providing unified registration services for seven categories of security interests of movable properties and rights nationwide, and ensured the smooth transition to undertaking the registration of four categories of movable properties and rights, namely production equipment, raw materials, semi-finished products and products, while continuously improving the supporting policies for a unified registration system for the security interests of movable properties and rights.

First, the PBC revised the Measures for the Registration of the Pledge of Accounts Receivable and released the Measures for the Unified Registration of the Security Interests over Movable Properties and Rights. The Measures fully specifies the rules for the registration and inquiry of the security interests of movable properties and rights, highlights the concept of registration and publicity, and defines the scope of unified registration. As stipulated in the Measures, the Credit Reference Center of the PBC (CCRC) is designated as the registration institution to carry out registration services; no substantive review of the registration contents or registration for pre-registration approval will be conducted; and early-warning clauses are included for the registration of the registering party. In addition, it sets out requirements on the establishment of an internal control system for registration information by the CCRC, to ensure a secure and stable system, and safeguard the lawful rights and interests of the registering party. Also, market entities are guided to carry out the registration and inquiry for the security interests of movable properties and rights in a standardized way.

Second, in line with the State Council’s requirements on the pilot programs for business environment innovation, the PBC collaborated with relevant authorities to proactively explore data sharing and interconnectivity between the unified registration system and the security interest registration information of automotive vehicles, vessels, and intellectual property rights in pilot cities, and promote the unified inquiry of the registration information of the security interests of all kinds of movable properties, so as to provide more convenient and comprehensive information services for financing entities.

Third, the PBC strengthened the publicity, promotion and application of the unified registration system for the security interests of movable properties. Besides encouraging and guiding commercial banks and other lending institutions to fully leverage unified registration policies and services to enhance the efficacy of movable property financing, we made continuous efforts to improve the functions of the unified registration system and expand its application to make it easier for businesses to raise funds. Thank you.

China Economic Information Service: My question is that, what measures have the PBC taken to ensure that the payment policies truly benefit MSBs? And what’s your plan for the next step? Thank you.

 

Yan Fang: Thanks for your question. Reducing payment fees for MSBs is an important task set for the PBC in the Report on the Work of the Government (2021). Prior to the introduction of the Notice on Reducing Payment Fees for MSBs and Self-employed Businesses, the PBC conducted surveys of nearly 50,000 MSBs to learn about payment fee conditions, conducted preliminary calculations, and communicated with some market institutions. On June 25, 2021, in collaboration with China Banking and Insurance Regulatory Commission (CBIRC), National Development and Reform Commission (NDRC), and the State Administration for Market Regulation (SAMR), the PBC issued the Notice to introduce 12 fee reduction measures in five aspects, namely bank account services, RMB settlement, e-bank businesses, bank card swiping, and payment account services. These measures have taken effect on September 30. As of November 30, various payment service entities, including banks, payment institutions and clearing institutions, have made fee concessions of RMB5.45 billion to over 73 million market entities in the real economy.

In order to increase the sense of fulfillment of MSBs and ensure full implementation of the policies that benefit businesses and people, the PBC made the following arrangements. First, the PBC organized undercover interviews and inspections. The PBC branches and sub-branches were required to go straight to bank outlets for on-site inspections. We visited over 80,000 bank outlets and 85 payment institutions nationwide to identify and solve problems in a timely manner. Second, the PBC completed re-inspections. We surveyed 190,000 MSBs and self-employed business through questionnaires, phone calls, on-site visit, etc., to ask about their satisfaction and listen to their appeals. Third, the PBC strengthened publicity. We made use of WeChat, Weibo, mobile apps, and other new media platforms to help MSBs and self-employed businesses get familiar with and benefit from fee reduction policies. Fourth, the PBC enhanced communication. By holding meetings, compiling and issuing briefings, selecting cases, and summarizing best practices in a timely manner, we enhanced the exchanges and communication with all parties. Fifth, the PBC cut fees as much as possible. We urged banks and payment institutions to accurately identify MSBs and self-employed businesses, and rectify inaccurate charges, overcharges and bundled fees.

Our research shows that notable results have been achieved, but the gap exists between policies and the implementation. We will promptly implement these policies. Thank you.

According to the current survey results, Certain achievements have been made. Still, there are some gaps in the implementation. We will step up our efforts to put them into place. Thank you.

China Business News: What are the differences between Carbon Emission Reduction Facility (CERF) and the special central bank lending for the clean and efficient coal use? How about their implementation?

 

Sun Guofeng: Since the beginning of 2021, the PBC has earnestly followed the important decisions and arrangements made by the CPC Central Committee and the State Council on peaking carbon emissions and achieving carbon neutrality, applied the new development philosophy fully, faithfully and comprehensively, and launched two new structural monetary policy instruments. The first instrument is the Carbon Emission Reduction Facility (CERF), which aims to mobilize more social capital to promote carbon emissions reduction, and support the development of three key areas for carbon emissions reduction, namely clean energy, energy conservation and environmental protection, and carbon emissions reduction technologies, in a steady orderly, targeted and direct manner. The second instrument is the RMB200 billion of central bank lending for the clean and efficient coal use. It aims to provide targeted support in seven areas, including safe, efficient, green and smart coal mining, clean and efficient coal processing, clean and efficient utilization of coal-fired power, clean industrial combustion and heating, clean civil heating and comprehensive utilization of coal resources, as well as the development and utilization of coalbed methane. The two instruments, with their own main focus, also share some commonalities. The CERF focuses on supporting clean energy, while the central bank lending for the clean and efficient coal use mainly supports the clean and efficient use of coal and coal-fired power as a traditional energy source. Given China’s rich endowment of coal resource, we must insist construction before destruction, and adopt a two-way strategy, that is, developing clean energy while continuously supporting the clean and efficient use of coal and coal-fired power. This way can both ensure the security of energy supply and help reduce carbon emissions in a scientific and orderly manner. The two instruments work together to support the achievements of carbon peaking and carbon neutrality goals.

Both of the two instruments adopt a direct mechanism of “central bank lending follows corporate loans”, under which financial institutions make their own decisions and bear the risks by themselves in granting loans to enterprises in relevant sectors at preferential interest rates. For qualified loans, the PBC will provide the lenders with low-cost funds in the amount of a certain percentage of the principal. For the loans granted under the CERF, the PBC will provide the lenders with funds equal to 60 percent of the principal. For the central bank lending for the clean and efficient coal use, the PBC will provide the lenders with funds equal to 100 percent of the principal. Both apply a lending rate of 1.75 percent.

To ensure accuracy as well as policies’ guidance and demonstration effects, for the CERF, the PBC requires financial institutions to disclose information concerning their loans related to carbon emissions reduction and the volume of carbon emissions reduction driven by these loans, etc. The information disclosed will be verified by qualified third-party professional institutions and be subject to public scrutiny.

Currently, the two instruments have been successfully put in place. The PBC has provided relevant financial institutions with the first batch of CERF funds totaling RMB85.5 billion and supported RMB142.5 billion qualified carbon emission reduction loans issued by financial institutions to 2,817 enterprises. This has driven carbon emission reduction by approximately 28.76 million tons. Going forward, the PBC will continuously leverage the two instruments to encourage more social capital to invest in green and low-carbon areas, thus supporting the achievements of peaking carbon emissions and carbon neutrality in a scientific and orderly manner.

Economic Daily: Recently, the PBC and China Banking and Insurance Regulatory Commission (CBIRC) jointly issued a notice, requiring banking institutions to well deliver financial services for the merger and acquisition (M&A) projects of major real estate enterprises for risk resolution. What is the background and purpose of the notice? The market considers it as a signal of bailing out real estate enterprises by the financial sector. What is the PBC’s response to it?

 

Zou Lan: Project M&As among real estate enterprises are regarded as the most effective market-based approach for the real estate sector to defuse risks and realize market clearing. China’s real estate market is highly market-oriented. Based on the statistics in recent years, each year, nearly 500 out of over 100,000 real estate enterprises in China underwent judicial process of bankruptcy and restructuring, which has become an important way for the sector to select the superior and eliminate the inferior. Some high-quality private or state-owned enterprises in the real estate sector hold the willingness to purchase the equity or assets of high-quality projects (subsidiaries) of real estate groups that have exposed risks or encountered difficulties in capital turnover. This creates specific and reasonable demands for financing services. Against this backdrop, the PBC and CBIRC jointly issued the notice to give full play to the positive role of project M&As in forestalling and defusing risks in the real estate market and promoting the sound development and a virtuous circle of the sector. This also embodies the principle of defusing risks in a market-oriented and law-based manner.

The notice encourages financial institutions to improve the efficiency of M&A services, create a sound financing environment for M&As, help defuse risks and promote the clearing of the real estate sector. Specifically, it specifies requirements on conducting M&A loan business in a sound, prudent and orderly manner, enhancing support for bond financing, actively offering M&A financing advisory services, improving the efficiency of M&A services and well managing risks.

In the long run, adopting M&As and other market-oriented approaches to advance the structural adjustment of the real estate market will help highly indebted business groups reduce both assets and liabilities while protecting the legitimate rights and interests of housing consumers, guide market entities to increasingly focus on the risk assessment and management of the projects, and foster a new development model for the real estate sector, thus developing a virtuous circle and driving the sound development of the real estate sector. Thank you.

Reuters: With respect to macro policies, how will the PBC strike a balance between stabilizing growth and making structural adjustments in 2022? How to understand the statement that “monetary policy tools should well play their roles in the dual function of adjusting both the aggregate and the structure”, which was proposed at the fourth quarterly meeting of PBC Monetary Policy Committee in 2021?

 

Sun Guofeng: Thank you for your questions. Stabilizing growth and making structural adjustments are complementary rather than contradictory. Structural adjustments need a relatively stable macro environment, while improvements in economic structure in turn stabilizes economic growth. Given that the macro economic development is a continuous process which cannot be interrupted, the macro policies must strike a balance between stabilizing growth and making structural adjustments. We will uphold the general principle of seeking progress while ensuring stability, reinforce inter-temporal policy design, enhance countercyclical adjustment, and safeguard the overall stability of the macro economy. We will insist well establishing the new before abolishing the old, and take solid and gradual steps, thus ensuring that the structural monetary policy tools will deliver more for structural adjustments, and play an active part in stabilizing growth.

To give full play to the dual function of monetary policy tools in adjusting both the aggregate and the structure, we should take both the aggregate and the structure into consideration. On the one hand, the PBC will use a mix of monetary policy instruments to keep liquidity adequate at a reasonable level and better stabilize aggregate credit growth, so as to ensure that the growth of money supply and AFRE are generally in line with nominal GDP growth, and that the overall financing costs for enterprises remain stable with a slight decline. On the other hand, the structural monetary policy tools are expected to actively play more roles. The PBC will continuously implement inclusive central bank lending and inclusive central bank discounts, advance the modified arrangements of the two monetary policy instruments providing direct support for the real economy, well leverage the newly established CERF and RMB200 billion of central bank lending for the clean and efficient coal use, and guide financial institutions to expand loans to MSBs, technological innovation and green development, etc. Meanwhile, the structural monetary policy tools will contribute to better stabilizing the aggregate credit growth. By giving full play to the dual function of monetary policy tools in adjusting both the aggregate and the structure, the PBC will provide remarkable support for high-quality economic development. Thank you.