China’s Central Bank Says Fundamentals of Economic Stability and Long-Term Growth Have Not Changed and Stresses Prudent Monetary Policy to Support Real Economy, among Other Measures

The People's Bank of China released the China Financial Stability Report (2022) on May 19. According to the report, China got off to a god start in the first year of the "14th Five-Year Plan" period (2021-2025), despite complex and severe domestic and foreign situations, as well as many risks and challenges.

Looking forward to the future, the fundamentals of China's economic stability and long-term growth have not changed, production factors that support high-quality development have not changed, and the Chinese economy still shows strong resilience and great potential.

China will adhere to supply-side reform, coordinate pandemic prevention and control and economic and social development, focus on stabilising the macroeconomic market, and maintain economic operation within a reasonable range. China will keep prudent monetary policy in place to increase support for the real economy, give better play to the dual functions of monetary policy tools, and ensure credit growth. China will improve the formation and transmission mechanism of market-oriented interest rates, promote the steady and moderate reduction of comprehensive financing costs for enterprises, and ensure that the financial system supports the real economy. China will improve the corporate governance of small and medium-sized banks, supplement the capital of small and medium-sized banks through multiple channels, and accelerate the disposal of non-performing assets. With the full implementation of the stock issuance registration system, China will further promote the reform of the capital market. China will further improve the legal system of the bond market, prevent and resolve bond market risks in a timely manner, and steadily promote a higher level of opening up of the bond market.