Dynamic moves help China navigate economic landscape

Officials have expressed confidence in China's financial market and called for more efforts to ensure its constant stable development.

Recently, the People's Bank of China has pushed for the implementation of a reduction in the reserve requirement ratio, a reduction in interest rates, four real estate financial policies and two policy tools to support the stable development of the capital market. These measures have bolstered market confidence, Pan Gongsheng, governor of the PBOC, said at the opening ceremony of the Annual Conference of Financial Street Forum 2024 held in Beijing on Friday.

"To promote high-quality economic development and sustainable growth, it is necessary to grasp the dynamic balance between the economic growth rate and growth quality, internal and external factors, consumption and investment. Macro policies should focus more on expanding consumption, better managing the relationship between the government and the market, and creating a favorable legal and business environment," Pan said.

The PBOC will improve its monetary policy framework, focusing on five major areas in finance: technology finance, green finance, inclusive finance, pension finance and digital finance, Pan said. He underscored that efforts will be made to enhance the capacity, intensity and level of financial support for technological innovation.

The bank will strengthen the framework for macro-prudential policies and systematic financial risk prevention and disposal mechanisms. It will steadily promote the institutional opening of the financial services industry and financial markets, facilitate trade and investment, prudently advance the internationalization of the renminbi, and promote the balanced and sustainable development of the Chinese and global economies.

With the theme "Trust and Confidence", the opening ceremony of the annual conference gathered more than 350 attendees to share their insights.

Li Yunze, head of the National Financial Regulatory Administration, said: "Currently, the overall operation of our country's economy is stable and making steady progress, with high-quality development being solidly promoted."

Li noted that the regulatory administration will adhere to the principle of taking action as a top priority, emphasizing the administration's commitment to implementing the decisions and arrangements of the Central Committee of the Communist Party of China and the State Council, implementing a package of incremental policies, guiding financial institutions to increase financial supply, optimizing resource allocation, accelerating the circulation of funds and supporting the improvement of the economy.

To better leverage the role of banks, Li said more efforts will be made to optimize credit management models, strengthen credit capacity construction, improve incentives and constraints mechanisms, implement due diligence and exemption requirements to make financial institutions "dare to lend, be willing to lend and be able to lend" to private enterprises.

Focusing on key areas and weak links, Li called for increasing financial support, expanding effective demand, boosting the stabilization of the real estate market, supporting the development of new quality productive forces, and helping to relieve the difficulties of small and micro enterprises.

He also requested support for expanding the opening-up of the financial industry in Beijing, so it can contribute more financial strength to the high-quality development of the capital's economy and society.

As an important destination for international financial investment, Beijing witnessed a growth of more than 5 percent in its GDP over the first three quarters of 2024. During this period, the city established 40 new domestic and foreign financial institutions and attracted nearly 600 billion yuan ($84.4 billion) in direct financing. Also, it saw the establishment of 1,255 new foreign-funded enterprises, an increase of 16 percent.

"Looking to the future, Beijing will accelerate the construction of a vibrant modern financial system and comprehensively enhance the level of serving the country's financial management functions," said Yin Li, secretary of the CPC Beijing Municipal Committee.

Yin stated that efforts will be made to improve the financial service infrastructure system; support the construction of nationally important financial platforms; assist the layout of international financial facilities in Beijing; and enhance the functions of Financial Street, the Lize Financial Business District, and the green financial demonstration zone in the Beijing Municipal Administrative Center.

He also underscored the need to build a financial market system conducive to innovation; support the deeper reform of the Beijing Stock Exchange; nurture top-tier investment institutions; develop patient capital; advance the construction of an international science and technology innovation center; and establish a global benchmark city for the digital economy.

In addition, he stressed the importance of creating a vibrant financial development ecosystem, expanding institutional openness in the financial sector and strengthening international financial exchanges and cooperation.

On top of that, Yin emphasized upholding a safe and stable financial environment, improving the financial regulatory system, enhancing the construction of the financial rule of law environment and safeguarding the bottom line of financial security.

Agustin Carstens, general manager of the Bank for International Settlements, said in his video speech at the opening ceremony that trust is a key factor for the success of public policies, forming the foundation of their effectiveness and legitimacy.

As a crucial engine driving global economic growth, strengthening domestic demand in China will benefit the world, injecting new momentum into the global economy and safeguarding global monetary and financial stability, Carstens said.

The BIS supports central banks across the world to achieve monetary and financial stability by providing a platform for communication and cooperation, fostering innovative practices, offering banking services and liquidity support, Carstens said. He added that the BIS remains a significant partner for countries, helping them maintain and promote monetary and financial stability.

As an important platform for the nation's open development, the conference is being held from Friday to Sunday, attracting more than 500 heavyweight participants from more than 30 countries and regions to hold discussions revolving around international cooperation in more than 40 activities.