Chinese Central Bank Chief Flags Maintenance of Normalised Monetary Policy, Surging Support for Green Finance

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Yi Gang (易纲), governor of the People’s Bank of China (PBOC), has signalled the continuation of regular monetary policy in 2021 amidst ongoing efforts to contain the spread of COVID-19.

“We have comparatively ample room for making monetary policy adjustments,” said Yi during a speech on the theme of “Effectively Making use of Regular Monetary Policy Space and Driving Green Finance Development” (用好正常货币政策空间 推动绿色金融发展) delivered on 20 March at the “China Development High-level Forum Round Table” (中国发展高层论坛圆桌会).

“Chinese monetary policy is kept within a regular range from start to finish; instruments and methods are ample, and interest rate levels are apt.

“We must cherish and effectively make use of the regular monetary policy space, and maintain the continuity, stability and sustainability of monetary policy.”

Yi Gang also flagged strong support from the Chinese central government for the funding of environmental undertakings, pointing out that PBOC has already made green financing a key work mission for 2021 and the 14th Five Year Period that runs from 2021 to 2025.

“Achieving carbon neutrality requires huge amounts of investment, and needs market-based methods to guide the financial system in providing the required investment and financing support,” said Yi.

“PBOC formulated standards for green bonds and green loans in 2015 and 2018 respectively, and is about to complete amendments to the ‘Green Bond Support Project Catalogue.'”

Yi further pointed out that climate change factors will be “fully included” in China’s policy frameworks for the 14th Five Year Period.

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