Chinese Central Bank Says Monetary Policy Environment Will Support Stability of Industrial Supply Chains

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A senior official from the People’s Bank of China (PBOC) has highlighted efforts to ensure that Chinese monetary policy can accommodate and support the stability of domestic industrial supply chains.

PBOC deputy governor Xuan Changneng (宣昌能) said that the central bank would “continue to expand the intensity of financial support, maintain the stability of industrial supply chains, uphold flexible moderation of steady monetary policy, and operate an appropriate monetary environment for the stability of industrial supply chains.”

Xuan made the remarks at the 5th International Hongqiao Economic Forum (第五届虹桥国际经济论坛).

The PBOC deputy governor said that the central bank would continue to engage in the large-scale development of supply chain financial services; raise the level of full industrial chain financial services in key areas, continue to improve the relevant policy systems and infrastructure for cross-border usage of the renminbi, as well as the foundations for usage of the renminbi for trade and investment in the real economy.

As part of efforts to prove the development of supply chain finance, PBOC will encourage financial institutions to expand their discounting of supply chain bills, and strengthen the development of PBOC’s supply chain bill financing platform and accounts receivable financing platform (中征应收账款融资服务平台), with an especial focus on improving the accessibility and convenience of finance for micro, small and medium-sized enterprises.

As of the end of August, PBOC’s accounts receivable financing platform had supported micro, small and medium-sized enterprises in obtaining 13.3 trillion yuan in funds.

Xuan also highlighted PBOC’s continued use of structured monetary policy tools to provide support to key areas, weak linkages and sectors affected by the Covid pandemic.

As of September the medium and long-term loan balance for China’s manufacturing sector stood at 8.8 trillion yuan, for year-on-year (YoY) growth of 30.8%, while in the same month PBOC launched its capital equipment upgrade and improvement special re-loan initiative, with a quota of over 200 billion, to facilitate lending by financial institutions to small businesses and individual industrial and commercial registrants.