A senior official from the Chinese central bank has highlighted the role of monetary and financial policy in advancing President Xi Jinping’s recent call for China to achieve more equitable wealth distribution under the rubric of “common prosperity.”
“In the next phase, China’s economic development still confronts numerous economic uncertainties,” said Wang Xin (王信), head of the research department of the People’s Bank of China (PBOC), on 27 November at the Caijing 2022 Forum: Forecasts and Strategy (《财经》年会2022:预测与战略).
“Monetary and financial policy can pay an active role in expediting common development, and supporting post-pandemic economic recovery.”
Wang highlighted a slew of focal points for PBOC including:
- Closely focusing on the impact of possible tightening of European and North American monetary policy, continuing to implement stable monetary policy, maintaining rationally ample liquidity, effectively using structural monetary policy, and more effectively maintaining employment and living standards.
- Using the issuance of special local bonds and other methods to promptly supplement bank capital. “The central bank can create an excellent liquidity environment for bond issuance, drive the reform of rural credit cooperatives, expand the vigour of disposal of non-performing assets, effectively dissolve risky small and medium-sized financial institutions, and raise the ability to service the real economy, and micro-and-small enterprises in particular.
- Continually improving the green finance system, better mobilising social funds to invest in green industries and low carbon transformation of traditional high-carbon sectors, and creating more employment opportunities.
- Vigorously developing green bonds and other green finance products, and supporting pension funds in investing in capital markets. Making it more convenient for the general public to increase financial investments and increase asset-based revenues.