Yicai.com:

Given the economic recovery, could you please share some more details regarding the monetary policies that the PBC will adopt in the coming period? Is there any room for further reserve requirement ratio (RRR) reduction and interest cuts? Also, will the PBC adopt new structural monetary policies? Thank you. 

Zou Lan:

Mr. Liu has actually already introduced some general information regarding your questions. I'd like to add some more information in this regard. 

China's economy is still on track for recovery after the adjustment of the pandemic prevention and control measures. The real economy is a dynamic circular system in terms of production, distribution, circulation and consumption, so the recovery of such a system requires some time, just as Mr. Liu has said. But we should be confident and patient for this. Moreover, the internal power of the economy is still a little weak, as the country is currently in an important period of economic recovery, transformation and upgrading, where the role of the old growth drivers, such as real estate and infrastructure, are weakening, while the new growth drivers, including sci-tech innovation, green development and modern industrial systems, are gathering momentum. As such, perception of the economic outlook may vary when it comes to different market entities. 

Since the beginning of the year, a prudent, targeted and effective monetary policy has supported the economic recovery. Just now, Mr. Liu has elaborated on economic aggregation, price levels and structures. In general, during recent years, China has upheld a prudent and normal monetary policy and therefore has ample policy space and rich policy tools to meet new challenges and changes. Going forward, according to economic development and price levels, as well as decisions and plans made by the CPC Central Committee and the State Council, the PBC will enhance macro regulation, and ensure a prudent, targeted and effective monetary policy. By leveraging various monetary policy tools including required reserve ratio, medium-term lending facility and open market operations, the PBC will maintain reasonably ample liquidity of the banking system, maintain appropriate increases of monetary credit, and advance a steady decrease of lending costs for enterprises and individuals. 

Meanwhile, the PBC will continue to give full play to the guiding role of structural monetary policies. The PBC will ensure the implementation of 200-billion-yuan increased relending and rediscount quota for the agriculture sector and small enterprises, continue to prolong instruments to support inclusive loans to micro and small enterprises (MSEs), instruments to lower carbon emission, as well as targeted relending for clean, efficient coal use, so as to strengthen efforts to support major sectors such as MSEs and green development. We will implement an action plan to support financing for technology-based enterprises, and increase efforts to support technological innovation. Loan programs to support the delivery of pre-sold housing projects will be continued. We will further advance targeted lending for real estate enterprises to solve their difficulties, as well as rental housing loan support plans, so as to promote steady and healthy development of the real estate market. For policy tools whose implementation periods have expired, the existing balance will continue to be effective. We will maintain support of the banking industry for relevant sectors, and create new policy tools if necessary, in a bid to provide targeted financial support for key areas and weak links in the stage of high-quality development. Thank you.