People’s Bank of China Intensifies Support for Technological Innovation and Consumption

On June 27, the People’s Bank of China announced that it will effectively implement a variety of structural monetary policy tools, focusing on delivering results across five key financial areas. The central bank emphasized its commitment to enhancing support for technological innovation and stimulating consumption, as well as providing targeted financing support for key sectors including the “two significant” and “two new” areas.

During its second-quarter monetary policy committee meeting for 2025, the central bank recommended strengthening the intensity of monetary policy regulation, and enhancing the foresight, precision, and effectiveness of its operations. It also stressed the importance of maintaining ample liquidity, guiding financial institutions to increase the supply of credit, strengthening the guiding role of the central bank's policy interest rates, and reinforcing the execution and supervision of interest rate policies. The meeting called for further reduction of overall social financing costs, improvement in the transmission mechanism of monetary policy, greater efficiency in the use of funds, and the prevention of idle capital circulation.

The committee also discussed deepening reforms on the financial supply side. It proposed the effective utilization of tools such as securities, fund, and insurance company swap facilities, as well as refinancing mechanisms for stock repurchases and shareholding increases. The meeting explored the institutionalization of these mechanisms to support the stability of the capital market. Continued efforts to provide financial services for the development of the private sector were emphasized, alongside the enhancement of the coordination mechanism for financing small and micro-sized enterprises to resolve persistent funding challenges.

Furthermore, the meeting called for accelerating the implementation of existing financial policy measures, increasing the revitalization of existing commercial housing and land reserves, stabilizing the real estate market, improving fundamental financial systems related to real estate, and contributing to the establishment of a new development model for the sector