Category: Policies Information

Since the beginning of 2024, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China has deepened reform and opening-up, strengthened macro regulation and control, and managed to combat risks and challenges. Economic performance overall was stable with steady progress, sustaining an upward trend. In first half year of 2024 (H1), the GDP grew 5 percent year on year and the CPI rose 0.1 percent year on year.

On January 15, with RMB779 billion worth of medium-term lending facility (MLF) expired, the People’s Bank of China (PBOC) conducted MLF operations in the amount of RMB995 billion, with an interest rate of 2.5 percent, unchanged from the previous operations.

On January 22, with the authorization of the PBOC, the National Interbank Funding Center (NIFC) announced the Loan Prime Rate (LPR) as follows: the one-year and the over-five-year LPR would be 3.45 percent and 4.20 percent, respectively, unchanged from the previous announcement.

Currently, with international commodity prices soaring and inflation running high in developed economies, China has become a stabilizer for the world economy by keeping prices stable.

To support the development of real economy and steadily bring down overall financing costs, the PBC is scheduled to cut the required reserve ratio (RRR) for financial institutions (excluding those that have already implemented an RRR of 5 percent) by 0.5 percentage points on December 15, 2021. The weighted average RRR for financial institutions will be 8.4 percent after the cut.

In pursuit of the carbon peaking and carbon neutrality goals, the People’s Bank of China (PBOC) launched the carbon emission reduction facility (CERF). This is a structural monetary policy instrument that aims to mobilize more social capital to promote carbon reduction, and support the development of clean energy, energy conservation, environmental protection, carbon reduction technology and other relevant key areas in a steady and direct manner.

Aiming to further support the development of the real economy, optimize the liquidity structure and lower financing costs, the People’s Bank of China (PBC) has decided to lower the required reserve ratio for financial institutions by 1 percentage point, 0.5 percentage point of which will be cut on January 15, 2019 and a further 0.5 percentage point on January 25, 2019.

In the first half of 2004, under the steering of the State Council, the People’s Bank of China (PBC) used various monetary policy instruments, including strengthened open market operations and differentiated required reserve ratios for financial institutions, to appropriately control the growth of base money and the faster than desired expansion of money and credit.

Tosupport the reemployment of unemployed laid-off workers and promote theimplementation of micro guaranteed credit policy, the People’s Bank of China,the Ministry of Finance, the Ministry of Labor and Social Security and theChina Banking Regulatory Commission jointly held a videoconference on promotingthe implementation of micro credit policy on the morning of July 6, 2004.

OnJanuary 1st, with the approval of the State Council, the PBCbroadened the floating range of financial institutions’ lending rates. Theupper limit of commercial banks and urban credit cooperatives’ lending rateswas raised to 1.7 times the benchmark lending rate, with that of rural creditcooperatives’ lending rates to 2 times the benchmark lending rate, while thelower limit of financial institutions’ lending rates stayed at 0.9 times thebenchmark lending rate.

ThePBC’s Branch Presidents Conference was held in Beijing on June 17, 2004. With apurpose of fully implementing the guiding principles and policies set by theCPC Central Committee and State Council on macroeconomic management, theconference reviewed the work in the first half of this year, analyzed currenteconomic and financial situation, and laid out the plans to be carried out inthe second half of this year.

Performance of the financial industry remained sound and stable this May, and macro-control policies started to take effect. Growth of money supply and loans moderated though medium and long term loans and foreign currency loans kept on increasing fast; growth of household savings deposits continued to fall; the money market interest rate and the exchange rate of Renminbi remained stable.

InJanuary, the performance of financial industry remained sound and stable.Growth of money supply witnessed large deceleration. RMB loans expanded RMB65.6billion yuan less than last January, and the growth of all types of loans byfinancial institutions continued to decelerate. Corporate deposits declinedmarkedly while household savings deposits grew rapidly. Inter-bank marketwitnessed active transactions and interest rates in the money market sawmoderate rise.

Financial institutions referred to in this table include the People’s Bank of China, policy banks, State-owned commercial banks, other commercial banks, city commercial banks, UCCs, RCCs, rural commercial banks, TICs, financing companies, leasing companies, postal savings institutions and foreign-funded financial institutions.

The StateCouncil has recently appointed new members into the Monetary Policy Committee.The Committee is now chaired by Mr. Zhou Xiaochuan, Governor of the People’sBank of China and comprises 12 other members.