China vows to boosting real economy support

China’s central bank will intensify its support for the real economy, fortify measures against systemic financial risks, and further enhance financial openness, according to People’s Bank of China (PBOC) Governor Pan Gongsheng.

Meanwhile, the central bank is committed to paying increased attention to both cross-cyclical and counter-cyclical adjustments, aiming to sustain reasonable growth in credit and social financing, Pan said during an exclusive interview with Xinhua.

Currently, the loan balance in China’s banking system exceeds 200 trillion yuan ($28.28 trillion), and the balance of social financing exceeds 30 trillion yuan. In recent years, China has seen an annual increase of around 20 trillion yuan in loans and an addition of over 3 trillion yuan in the scale of social financing, Pan added.

The PBOC will enhance its support for major national strategies, key sectors, and areas with vulnerabilities. The central bank will fully utilize structural monetary policy tools to strengthen assistance for small and micro businesses, as well as advancements in scientific and technological innovation.

Pan also pledged to maintain interest rates at an appropriate level, ensuring a gradual reduction in financing costs for the real economy. He reiterated the PBOC’s commitment to the stability of the renminbi exchange rate, expressing confidence in the central bank’s ability to keep the yuan’s exchange rate stable at a reasonable and balanced level.

Pan acknowledged that China’s financial risks are generally under control, and the PBOC plans to enhance mechanisms for preventing, warning, and managing financial risks. Regarding local government debts, Pan stated that the PBOC will work to mitigate risks associated with outstanding local government debt, impose strict controls on new debt, and provide emergency liquidity to heavily indebted local governments when necessary.

The PBOC is set to advance the internationalization of the yuan, facilitate trade and investment, and progressively broaden the institutional opening-up of the financial market, according to Pan. He emphasized that China will actively participate in global financial governance and cooperation to enhance its influence in shaping major international financial rules and standards.

(With input from Xinhua)

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