Creating a good monetary and financial environment provides strong support for high-quality economic development - Interview with Pan Gongsheng, Party Secretary and President of the People's Bank of China.

Xinhua News Agency, Beijing, January 22 Finance is the lifeblood of the national economy and is related to the overall situation of China's modernization construction. The "Eleventh Five-Year Plan" proposed to "accelerate the construction of a strong financial country" and put forward specific measures such as "improving the central bank system." The recent Central Economic Work Conference made a series of deployments regarding continuing to implement a moderately loose monetary policy. With the new start of the "Eleventh Five-Year Plan," how to implement a moderately loose monetary policy? In which key areas will the construction of a strong financial country be promoted? How to improve the quality and efficiency of financial services for the high-quality development of the real economy? Xinhua News Agency interviewed Pan Gongsheng, secretary of the Party Committee and President of the People's Bank of China. Continuing to implement a moderately loose monetary policy Question: The Central Economic Work Conference proposed to continue implementing a moderately loose monetary policy. How will the People's Bank of China implement this requirement? In 2026, the People's Bank of China will continue to implement a moderately loose monetary policy, considering promoting stable economic growth and reasonable price increases as important considerations of monetary policy. We will play the integrated effects of increment policy and stock policy to create a favorable monetary and financial environment for stable economic growth, high-quality development, and stable operation of the financial market, providing strong financial support for a good start to the "Eleventh Five-Year Plan." In terms of quantity policy, we will flexibly and efficiently use various monetary policy tools such as reserve ratio cuts and interest rate cuts to maintain ample liquidity, ensuring that the scale of social financing and money supply growth matches the expected target of economic growth and the price level. There is still some room for reserve ratio cuts and interest rate cuts this year. The People's Bank will also do a good job in the execution and supervision of interest rate policies, promoting the low operation of the overall financing costs. In terms of structural policies, the People's Bank of China has already introduced a batch of monetary and financial policy measures at the beginning of this year, optimizing and improving the policy elements of structural monetary policy tools. In terms of interest rates, the interest rates for various structural monetary policy tools have been reduced by 0.25 percentage points. In terms of types, a special 1 trillion yuan refinancing facility for privately-owned enterprises has been established, and a risk-sharing tool for technology innovation and privately-owned enterprise bonds has been merged. In terms of quotas, the refinancing quota for supporting agriculture and small businesses has been increased by 500 billion yuan to 4.35 trillion yuan, and the refinancing quota for technology innovation and technological transformation has been increased by 400 billion yuan to 1.2 trillion yuan. In terms of support coverage, the support areas for carbon emission reduction tools and consumption and elderly care refinancing have been expanded. These policies have been implemented. We will continue to maintain the stable operation of the financial market. Strengthen expectations management, maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Strengthen supervision and management of the bond market, foreign exchange market, money market, bill market, and gold market. Establish mechanism arrangements for providing liquidity to non-bank institutions in specific scenarios. Continue to use two monetary policy tools to support the stable development of the capital market. "Two pillars" support the construction of a strong financial country Question: The "Eleventh Five-Year Plan" proposal suggested "building a scientifically sound monetary policy system and a comprehensive macro-prudential management system." What considerations does the People's Bank of China have in this regard? Building a scientifically sound monetary policy system and a comprehensive macro-prudential management system is a strategic measure to promote high-quality development of finance and accelerate the construction of a strong financial country during the "Eleventh Five-Year Plan." In recent years, there have been profound changes in the structure of China's financial system, with the proportion of new loans to the incremental scale of social financing in 2025 falling below 50%. In this context, the improvement of the monetary policy framework needs to adapt to the evolving financial system, improving the scientificity and effectiveness of regulation. During the "Eleventh Five-Year Plan," we will focus on advancing the following six aspects of work: 1. Optimize the monetary policy target system, especially the intermediate variables, and focus less on quantity targets, using financial total as more of an observational, reference, and anticipatory indicator to create conditions for further leveraging the role of interest rate regulation. 2. Improve the mechanism for short, medium, and long-term coordination and distribute the base currency issuance mechanism with Chinese characteristics, gradually utilizing government bond trading in liquidity management to ensure ample liquidity in the banking system. 3. Strengthen the market-oriented interest rate formation, regulation, and transmission mechanisms, further facilitating the transmission of the central bank policy rate to market benchmark rates and various financial market rates. 4. Improve the system of structural monetary policy tools to better guide and incentivize financial institutions to optimize lending in key areas and carry out major financial initiatives. 5. Improve the formation mechanism of the RMB exchange rate, adhere to the decisive role of the market in rate formation, maintain exchange rate flexibility, and guard against exchange rate over-adjustment risks. 6. Enhance policy communication and transparency, further improve a credible, normalized, and institutionalized market communication mechanism. In the construction of a comprehensive macro-prudential management system, we will focus on the following: 1. Strengthen the monitoring and evaluation of systemic financial risks, establish a standardized, systematic, quantitative, and qualitative combined monitoring and evaluation framework. 2. Gradually expand the coverage areas and management objects of macro-prudential supervision, covering financial markets, non-bank financial institutions, financial infrastructure, and new areas such as internet finance. 3. Continue to enrich and improve the toolbox of macro-prudential management, enhance management mechanisms, and achieve the full-process management of macro-prudential management tools, from creation and implementation to evaluation, feedback, and optimization. 4. Improve the legal protection and governance mechanisms of macro-prudential management, focusing on promoting legislative amendments such as the law of the People's Bank of China, strengthening the overall coordination of macro-prudential policies with monetary policies and micro-prudential supervision. Continuously improve the quality and efficiency of financial services for the high-quality development of the real economy Question: The Central Economic Work Conference proposed guiding financial institutions to support key areas such as expanding domestic demand, technological innovation, and small and medium-sized enterprises. What measures will the People's Bank of China take? Guiding financial institutions to support key areas such as expanding domestic demand, technological innovation, and small and medium-sized enterprises is a strategic measure to strengthen the domestic circulation and promote high-quality development. The People's Bank of China will increase policy support, refine policy measures, and continuously improve the quality and efficiency of financial services for the high-quality development of the real economy. In expanding domestic demand and supporting consumption, we will adopt comprehensive measures to meet the diverse financial needs in the consumption sector. We have set up a special 500 billion yuan refinancing facility for consumer and elderly care, incentivizing and guiding financial institutions to innovate financial products; we will continue to promote the convenience of payment services, improve the level of consumer financial services; implement a one-time personal credit repair policy, improve the consumer financial environment; support eligible financial institutions to issue financial bonds to enhance the funding capacity in the consumption sector. In supporting technological innovation, we will continue to increase policy support. Recently, the People's Bank of China increased the refinancing quota for technology innovation and technological transformation, and included privately owned small and medium-sized enterprises with higher levels of R&D investment in the supported areas; we merged and set up a risk-sharing tool for technology innovation and privately owned enterprise bonds, providing refinancing support to promote the development of the "technology board" in the bond market. In supporting small and medium-sized enterprises, we will continue to improve the inclusiveness and convenience of financing. We will increase the refinancing and rediscount quotas for supporting agriculture-related loans and small businesses, and establish a special 1 trillion yuan refinancing facility for privately owned enterprises, focusing on supporting small and medium-sized private enterprises. We support financial institutions in issuing financial bonds for small and micro enterprises, making good use of financial bond financing support tools for private enterprise bonds. We will improve the credit enhancement system for small and medium-sized private enterprises and leverage government financing guarantees and information sharing mechanisms. Additionally, we will strengthen coordinated cooperation and information sharing with departments such as development and reform, commerce, industry, and technology. Promote financial institutions to improve internal incentive and constraint mechanisms, enhance the convenience, effectiveness, and coverage of financial services. Strengthen the coordination between monetary policy and fiscal policy, make good use of the incentive effects of fiscal interest subsidies, guarantees, and risk compensation policies, and amplify the effectiveness of financial support. Continuing to advance global financial governance reform and international financial cooperation Question: How will the People's Bank of China continue to promote global financial governance reform and international financial cooperation? In the future, the People's Bank of China will actively implement global governance initiatives, adhere to the path of reform and opening up, and multilateralism, and contribute to the construction of a more fair, just, inclusive, and resilient global financial governance system. 1. Deepen institutional opening in the financial sector, continue to promote the high-level opening up of the financial services industry and financial markets, orderly promote the internationalization of the RMB, support the construction of the Shanghai international financial center, and consolidate and enhance Hong Kong's status as an international financial center. 2. Continue to build and develop a multi-channel, widely covered, safe, and efficient cross-border RMB payment system, and enhance international cooperation in cross-border payments. 3. Actively participate in international financial governance and cooperation, pragmatically conduct multiple bilateral currency and financial cooperation, actively participate in global macro policy coordination and international financial regulatory rule-making, continue to promote IMF quota reforms, and enhance the representation of developing economies. 4. Strengthen regulatory capacity building that matches high-level openness, promote the construction of a diversified and efficient global financial safety net, and resolutely safeguard national financial security. This article is reprinted from "Xinhua News Agency." Editor: Jiang Yuanhua.