"People’s Bank of China Says Lending Boost Going Smoothly
China’s central bank seems to be content with how its efforts to boost lending are going, with the report from its first regular monetary-policy meeting of the year calling bank liquidity “ample.” That might be something of an understatement, as the latest data show a record surge in new lending in March. But with the economy still fragile despite recent signs of improvement, the central bank isn’t yet ready to change course. Here is a complete translation of the central bank’s statement issued Sunday (Chinese original here).
The People’s Bank of China Monetary Policy Committee recently held its regular meeting for the first quarter of 2009 in Beijing.
The meeting analyzed the current economic and financial situation both at home and abroad. The meeting held that the international financial crisis continues to spread and deepen, and international financial markets are still in turmoil. To cope with the serious impact of the international financial crisis, and promote stable and rapid economic development, China adjusted its macroeconomic policy orientation in a timely manner, and adopted a series of measures to expand domestic demand and promote economic growth. At present, the measures taken have obtained some initial results and there have been some positive signs. Liquidity in the banking system is ample, money and credit are growing rapidly, and the financial system is running smoothly.
The meeting discussed the direction of monetary policy in the next stage. The meeting held that it is necessary to conscientiously carry out the arrangements of the Party Central Committee and State Council on macroeconomic policy-making, implement a moderately loose monetary policy, and maintain the continuity and stability of policy. We will further rationalize the monetary policy transmission mechanisms, maintain sufficient liquidity in the banking system, and ensure the volume of money and credit can meet the needs of economic development. We will continue to optimize the structure of credit, increase support to weaker sectors such as rural areas and small- and medium-sized enterprises, effectively solve the financing problems faced by some companies, and strictly control lending to companies in sectors that have high levels of energy consumption, high levels of pollution or excess industrial capacity. We will continue to push forward financial reform and innovation, improve risk management, and enhance the ability of financial companies to ward off risks.
This meeting was chaired by Zhou Xiaochuan, governor of the People’s Bank of China governor and chairman of the Monetary Policy Committee. Members Li Yong, Su Ning, Yi Gang, Liu Mingkang, Shang Fulin, Wu Dingfu and Jiang Chaoliang attended the meeting, while You Quan, Zhu Zhixin, Ma Jiantang, Hu Xiaolian and Fan Gang were on leave. Comrades from the People’s Bank of China branches in Tianjin, Shenyang and Chengdu also attended the meeting.