Hong Kong Ta Kung Wen Wei Media Group:

Since the beginning of this year, monetary policy has effectively supported high-quality economic development and the stable operation of financial markets. I would like to ask how the People's Bank of China will enhance its forward-looking flexibility and the targeted approach in the second half of the year, and continue to implement a moderately loose monetary policy? Thank you.

Zou Lan:

Thank you for your questions. Let me address these. Since the beginning of this year, the People's Bank of China has implemented a moderately loose monetary policy in accordance with the decisions and plans of the CPC Central Committee and the State Council, maintained ample liquidity, and supported the economy toward new and better development and a good start to the "15th Five-Year Plan." Overall, key macro-financial indicators reflecting financial performance have fully demonstrated a moderately loose monetary policy. Social financing conditions have remained relatively loose, and the quality and efficiency of financial services supporting the real economy continue to improve. The before mentioned financial data for June is a good example of this.

In the second half of the year, the People's Bank of China will implement the central government's plans, enhance the forward-looking, flexible, and targeted nature of monetary policy, and strengthen counter-cyclical and cross-cyclical adjustments based on the domestic and international economic and financial situation and the operation of financial markets. This will create a suitable monetary and financial environment allowing for stable economic growth, high-quality development, and smooth operations of the financial markets.

In terms of quantity, the People's Bank of China has a very rich toolbox, including reserve requirements, reverse repos, medium-term lending facilities, and government bond trading, etc. Among these, the reduction to the reserve requirement ratio mainly focuses on injecting long-term liquidity, while reverse repos and medium-term lending facilities mainly provide short- and medium-term liquidity. In practice, we will select and combine these tools appropriately and according to the needs of liquidity management. This will maintain ample liquidity and guide the growth of social financing and money supply, in turn matching the expected targets of economic growth and general price levels.

Regarding interest rates, since the beginning of this year, China's economy has maintained a generally stable and positive development trend. This demonstrates strong resilience and vitality. However, the foundation for continued steady and positive economic growth still needs to be further consolidated. In terms of prices, the PPI rebounded relatively significantly due to external factors, but the CPI increase was relatively moderate. Going forward, we will guide and adjust interest rates appropriately based on the macroeconomic conditions, price trends, and the needs of macroeconomic regulation. This is in line with the aim of keeping the overall cost of financing in society at a low level.

At the same time, the People's Bank of China will continue to leverage the role of other monetary and financial policies, such as structural monetary policy tools. Just now, Mr. Xie has also made a detailed introduction in this regard. We must take supply-side structural reform in the financial sector as the main focus. We must also improve the quality and efficiency of financial services to the real economy, and optimize the credit structure continuously. On the one hand, we will implement a series of structural monetary policy measures. This was introduced at the beginning of the year and enables the improved design and management of tools, and, when necessary, increase the amount of tools and optimize policy elements in response to market demand. This strengthens support for key areas such as expanding domestic demand, technological innovation, and small- and medium-sized enterprises. On the other hand, we should guide financial institutions to conduct scientific risk assessments, implement differentiated policies, provide support while maintaining control, and improve the efficiency of fund utilization. Thank you.