PBC to Implement Moderately Loose Policy to Boost
Growth
The People´s Bank
of China (PBC) held a Governors´ Meeting to convey and study principles of the
recent executive meeting of the State Council on November 5 and the meeting of
senior provincial and ministerial officials on November 11, and set forth steps
to implement these principles in the PBC.
Ten timely
measures aiming at further expanding domestic demand and promoting economic
growth have been released by the Party Central Committee and the State Council
in an effort to address the adverse impact of the international financial
crisis on China. The meeting holds that, concrete and well prioritized, these
measures will promote balanced economic development in the country´s urban and
rural areas, lend support to economic growth, and improve social welfare and
benefit of the Chinese people. These measures are of immediate relevance and
aim for long-term development, addressing the financial crisis in a way that
promotes sustainable social and economic development. These measures have been
put forward in line with the requirements for applying a scientific approach to
development, and serve the fundamental interests of the people. They have also
greatly boosted domestic and international confidence in China´s economic
growth.
The meeting asks
staff of the PBC Headquarters and its branches and affiliations to seriously
study, accurately comprehend and grasp the principles laid out by the central
government, further integrate their thinking and action with the central
government´s judgment on economic situation and its policy responses. With
strong resolution and following a balanced approach, the PBC should strengthen
its surveillance on and analysis of economic and financial performance, work
out specific measures to deliver a moderately loose monetary policy, and
provide financial services to further boost domestic consumption and maintain a
stable and rapid economic growth. The PBC should undertake its tasks in line
with the requirement that the measures should be timely, vigorous, well
targeted and thoroughly implemented.
First, ensure adequate liquidity in the financial
system and stay ready to provide liquidity to financial institutions when
needed. Second, keep appropriate growth of money and credit, and beef up
bank lending to bolster economic growth. Remove credit ceilings for commercial
banks to expand aggregate credit. Third, strengthen window guidance and
policy guidance with the priority laid upon credit structure optimization. The
policy of differentiated treatment to different sectors will be combined with
the proactive fiscal policies and efforts will be made in the following areas:
financial reform, innovations, credit support to key projects, small- and
medium-sized enterprises, "agriculture, rural areas and rural residents",
post-disaster reconstruction, education and job creation, technological
upgrading, M&A, the shift of over-capacity industries to overseas markets,
energy conservation and pollution reduction, circular economy and etc. At the
same time, lending to highly polluting and heavily energy-consuming industries
and over-capacity industries will be restricted so as to promote economic
restructuring and the shift of economic development mode. Efforts will be made
to encourage and guide financial institutions to increase export credit and
explore the possibility of providing medium- and long-term RMB export
financing. Fourth, let enterprise bonds play a more important role in
financing. Efforts should be made to accelerate the development of corporate
bonds, enterprise bonds, short-term financing instruments and medium-term notes
and other non-financial corporate bonds to diversify funding channels of
enterprises. It is important to expedite the growth of inter-bank bond market
with institutional investors as the major players, in order to provide a
platform for the implementation of proactive fiscal policy and moderately loose
monetary policy. Fifth, further improve financial service provided by
the central bank. The PBC will make more scientific and accurate prediction and
analysis of cash in circulation, in order to make far-sighted adjustments in
cash supply; streamline the payment and settlement process of treasury fund,
and enhance the efficiency of treasury fund collection and disbursement; expand
the coverage of government subsidy in terms of supporting agriculture and
disaster relief and ensure that the subsidies appropriated to welfare programs,
infrastructure construction, ecological environment conservation and
post-disaster construction be directly channeled from the treasury to end recipients;
actively promote direct handling of collection and disbursement of social
security funds through the treasury account, to enhance the efficiency for the
collection and decentralized disbursement of social security funds,
safeguarding the fundamental interests for the people and promote social
harmony and stability.
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