In a recent report published on Saturday, People’s Bank of China Governor Pan Gongsheng outlined a comprehensive plan to promote a sustained economic recovery while addressing financial risks. This announcement comes after China’s economy demonstrated faster-than-expected growth in the third quarter, further underscoring the need for precise and forceful policy measures.
The central bank aims to expand domestic demand and reduce financial risks by guiding financial institutions to lower real lending rates and minimize financing costs for both businesses and individuals. This strategic approach is designed to invigorate the country’s capital markets and bolster investor confidence.
Pan Gongsheng emphasized the importance of responding to changing economic conditions through macro policy adjustments, strengthening financial supervision, and maintaining a focus on expanding domestic demand to boost confidence and prevent risks, thereby ensuring a sustained economic recovery.
One of the highlights of the report was China’s commitment to keeping the yuan stable while preventing abnormal fluctuations in cross-border fund flows and maintaining stability in the foreign exchange market. Furthermore, the country intends to steadily advance its yuan internationalization scheme and establish a risk warning and control system for overseas investments to safeguard its foreign currency assets.
In addition to these measures, China’s central bank will guide financial institutions in resolving local government debt risks, including those associated with local government financing vehicles. The report also addressed the default risk of bonds issued by major real estate enterprises, with the goal of preventing risk contagion across stock, bond, and foreign exchange markets to ensure the stable operation of financial markets.
The report’s significance is amplified by its timing, as it is the first time Governor Pan Gongsheng has commented on policy following the publication of third-quarter economic data. This document outlines the authorities’ immediate priorities and has been delivered to the country’s parliament, underscoring the government’s commitment to a robust and sustainable economic recovery.
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