Chinese Central Bank Outlines Measures to Realise Xi’s Hopes for Common Prosperity, Stresses Monetary Policy Stability

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A senior official from the People’s Bank of China (PBOC) has highlighted a range of policy options they will adopt in response to President Xi Jinping’s recent call for greater wealth equality and achieving “common prosperity.”

Zou Yan (邹澜), head of PBOC’s financial markets department, said at a press conference held on 7 September that “PBOC will continue to earnestly and thoroughly implement the CCP Central Committee’s major policy decision concerning expediting common prosperity amidst high-quality development.”

Zou said that measures that PBOC will adopt to expedite common prosperity will include:

  • Firmly refraining from “flood-style” irrigation.
  • Effectively executing monetary policy and maintaining the stability of the renminbi, which Zou said were “extremely important” to driving common prosperity.
  • Making the development of financial support areas more balanced.
  • Effectively implementing re-financing policies in provinces where lending growth is easing.
  • Expanding financial support for key areas and weak linkages, including financing for micro, small and medium-sized enterprises.
  • Driving consolidation and expansion of poverty alleviation outcomes and rural village revitalisation.

Zou said that China would also “vigorously develop financial inclusion, continue to deeply drive the establishment of a rural village credit system, strengthen financial knowledge promotion and education and the maintenance of the rights and interests of financial consumers, and enable the masses to equally and safely enjoy modern financial services.”

With regard to the real estate sector, Zou reiterated China’s commitment to the stance that “houses are for occupation not speculation, and said that it would “effectively implement a real estate finance prudential regulation system and expand the vigour of financial support for the residential leasing market.”

PBOC data indicates that of the end of July China’s financial inclusion micro-and-small loan balance stood at 17.8 trillion yuan, for a YoY increase of 29.3%, while these loans had provided support to 38.93 million micro-and-small enterprises (MSE) around China, for a YoY increase of 29.5%.

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