The People’s Bank of China (PBOC) has just convened a teleconference meeting on work arrangements and key policy concerns for the second half of 2020, flagging a focus on five key areas.
These five areas of emphasis include:
- “Monetary policy requires more flexible moderation and targeted guidance; pragmatically ensure that various policies already unveiled for stabilising enterprise and protecting employment are implemented and prove effective.”
- “Guarding the bottom line, continuing to effectively wage the three year war to prevent and resolve major forms of financial risk.”
- “Firmly and unwaveringly advancing the stable and orderly opening of the financial sector.”
- “Continually deepening system and mechanism reform in the financial sector.”
- “Continuing to effectively perform financial management and financial services work.”
PBOC said that it would continue to drive “capital supplementation for small and medium-sized banks, with a focus on “expanding the vigour of support for the issuance of capital supplementation bonds by small and medium-sized banks.”
Analysts point out that China’s smaller regional lenders have been roiled by a slew of bank runs and failures since May 2019, while these modest-sized banks play a key role in lending to the small and micro-enterprises to whom PBOC has long sought to more effectively channel funds.
PBOC also said that the COVID-19 pandemic has in no way disrupted the pace of efforts to open up China’s financial sector, pointing to China’s cancellation of foreign ownership restrictions for securities, fund, futures and life insurance companies in the first half of 2020, as well as the removal of investment quota restrictions for qualified foreign institutional investors.
PBOC committed to continuing to effectively implement financial opening measures that have already been announced, which include:
- Driving implementation of a negative list system which provides equal treat with domestic Chinese parties,
- Actively and appropriately driving internationalisation of the renminbi and capital account convertibility,
- Unification of bond market opening forex management policies.
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