People’s Bank of China: Strengthen the guiding role of credit policies and continue to improve the financial system and mechanism to effectively support the real economy

Shanghai Securities News China Securities News (Reporter Zhang Jones) On September 21, the Financial Market Department of the People’s Bank of China published an article on the People’s Bank of China website and the “People’s Bank of China” WeChat public account, “Returning to the Origin to Comprehensively Improve the Efficiency and Level of Financial Services for the Real Economy”. The article said that at present, my country is at a critical juncture in economic recovery, and we must use a sense of urgency that time cannot wait to consolidate the foundation for the recovery of the real economy and enhance the stamina for development. The People’s Bank of China will continue to deepen the structural reform of the financial supply side, give full play to the dual functions of monetary policy volume and structure, strengthen the guiding role of credit policy, continue to improve the financial system and mechanism to effectively support the real economy, and create a good currency for the high-quality development of my country’s real economy. financial environment.

People’s Bank of China: Strengthen the guiding role of credit policies

The article said that since the 19th National Congress of the Communist Party of China, the People’s Bank of China has adhered to the “people-centered” development philosophy, insisted on a reasonable and sufficient total amount, focused on market guidance in mechanism, strengthened precise drip irrigation in structure, and actively built a financial system that effectively supports the real economy. Long-term mechanism, and strive to provide higher-quality and more efficient financial services for the development of the real economy.

The People’s Bank of China manages the aggregate gate well and creates a suitable monetary and financial environment. The article shows that the People’s Bank of China adheres to the goal of serving the high-quality development of the real economy, continuously improves the money supply control mechanism, manages the general gate of money and credit, strengthens cross-cycle design, and promotes the high-quality development of the real economy with modern currency management.

First, maintain a reasonable and stable growth in the total amount of money and credit. The People’s Bank of China comprehensively uses a variety of monetary policy tools to maintain reasonable and sufficient liquidity. Since 2018, the deposit reserve ratio has been lowered 13 times, releasing about 10.8 trillion yuan of long-term funds. Turn over over 1.1 trillion yuan of surplus profits in accordance with the law, and support the accelerated implementation of tax refunds for small and micro enterprises.

From 2018 to 2021, the average growth rate of my country’s M2 is 9%, basically matching the average growth rate of nominal GDP of 8.3% in the same period, supporting the realization of a long-term optimized combination of economic growth, price stability, and full employment.

The second is to seek progress while maintaining stability and carry out cross-cycle adjustment. In accordance with the CPC Central Committee’s requirement that “prudent monetary policy should pay more attention to flexibility and moderation”, the People’s Bank of China strengthened cross-cycle adjustment, innovated and enriched the monetary policy toolbox, and enhanced the forward-looking and effectiveness of serving the real economy.

Since 2022, in the context of the triple pressure of the economy facing shrinking demand, supply shocks and weakening expectations, the People’s Bank of China has timely increased the credit line of policy development banks by 800 billion yuan, and promoted the establishment of policy development financial instruments of 300 billion yuan. An additional quota of more than 300 billion yuan was added to support financial institutions in accelerating the pace of medium and long-term infrastructure loans, actively matching the financing needs of infrastructure projects, and helping to stabilize the macroeconomic market.

The People’s Bank of China has designed a market-oriented mechanism to improve the quality and efficiency of financial services for the real economy. The article said that the People’s Bank of China attaches great importance to making good use of the power of the market. In policy design, it not only pays attention to the government’s policy guiding role, but also pays attention to the introduction of market-oriented institutional arrangements that are compatible with incentives. Reform measures to fully mobilize the autonomy and enthusiasm of financial institutions, improve the effect of policy transmission, optimize the efficiency of financial resource allocation, and continuously improve the quality and efficiency of financial services to the real economy. The first is to give full play to the resource allocation role of interest rate marketization; the second is to innovate and launch a structural monetary policy toolbox; the third is to improve the financial market mechanism and enrich financial products and tools.

In terms of enriching financial products and tools, the article shows that the People’s Bank of China has established a multi-level financial market product system, comprehensively used financial innovations such as bonds and bills, and met the financing needs of various entities through market-oriented methods. With perpetual bonds as a breakthrough, banks will be encouraged to replenish capital through multiple channels, so as to enhance the sustainability of financial support for the real economy. Special financial bonds such as green, mass entrepreneurship, agriculture, rural areas, and small and micro enterprises, as well as rural revitalization bills, poverty alleviation bills and other products were launched to broaden the sources of funds for the real economy. Guide the creation of bond financing support tools for private enterprises, use credit enhancement methods to leverage and support difficult private enterprises to issue bonds for financing, and boost market confidence. Standardize innovative supply chain bills, standardized bills and other products, and promote the stable circulation of the industrial chain supply chain.

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