South China Morning Post：

In a recent interview, as the governor of the PBC, Pan Gongsheng indicated that there are plans to implement new incremental policies. Could you provide more details on what these measures might entail? Will the expected interest rate reductions in the United States hasten the adoption of these policies? Thank you.

Lu Lei:

Thank you for your questions. Since they concern specific aspects of monetary policy, I would like to ask Mr. Zou to address these questions.

Zou Lan:

Thank you for your concern about monetary policy. As Mr. Lu just mentioned, since the beginning of this year, the PBC has implemented three significant monetary policy adjustments which have effectively supported economic recovery. At the beginning of the year, proactive and early measures were taken in terms of total amount, with an unexpected substantial cut in the reserve requirement ratio of 0.5 percentage points, helping the economy achieve a good start. In the second quarter, we focused on key aspects of high-quality development, established relending programs for technological innovation and transformation as well as launched a combination of policies targeting the real estate market. Since the third quarter, reforms have intensified in response to the arrangements of the third plenary session of the 20th CPC Central Committee. In late July, a series of monetary policy measures were introduced, including lowering policy interest rates and improving the interest rate adjustment mechanism. This reflects both short-term adjustments and medium- and long-term reform strategies.

Overall, a prudent monetary policy has created a favorable monetary and financial environment for economic recovery and development. In terms of total volume, there has been a reasonable growth in money supply and credit, with the growth rate of social financing and RMB loans exceeding that of nominal GDP. Structurally, support for key areas and weak links has been strengthened, and the credit structure has been continuously optimized. In terms of pricing, the cost of corporate financing and household loans have both decreased. Mr. Lu has already provided detailed data on this.

We will continue to closely monitor monetary policy adjustments of major developed economies. At the same time, China's monetary policy will continue to prioritize domestic needs, with a focus on supporting the domestic economic development. First, in terms of total amount, we will enhance counter-cyclical adjustments, flexibly use various monetary policy tools, maintain reasonable growth in money supply and credit as well as will work to steadily reduce comprehensive social financing costs to support and strengthen the positive momentum of economic recovery. Second, in terms of structure, we will focus on several key areas such as the five major tasks of promoting science and technology finance, green finance, inclusive finance, old-age finance, and digital finance ; the national strategy of issuing and making good use of ultra-long special treasury bonds to support the implementation of major national strategies and build up security capacity in key areas ; and the action plan to promote large-scale equipment renewals and trade-ins of consumer goods. We will continue to guide financial institutions to increase credit support for key areas and weak links, and, more specifically, focus on meeting reasonable consumer financing needs. Thanks.