China's monetary policy to boost domestic demand, supply-side structural reform: central bank
A view of the city of Guangzhou in southern China, January 1, 2023. /CFP
A view of the city of Guangzhou in southern China, January 1, 2023. /CFP

A view of the city of Guangzhou in southern China, January 1, 2023. /CFP

China's prudent monetary policy will focus on coordinating the expansion of domestic demand and supply-side structural reform, Xuan Changneng, vice governor of the People's Bank of China, said on Friday. 

To increase domestic demand, measures will be taken to maintain reasonably sufficient liquidity, guide financial institutions to release credit supply reasonably and in accordance with market principles and the rule of law, Xuan told a press conference. 

China will actively coordinate monetary policy with fiscal and social policy to ramp up support for enterprises and key groups, stabilizing and creating jobs and raising the incomes of urban and rural residents through multiple channels. 

Work should be done to ensure the monetary policy is reasonable and moderate, and to avoid flood-like stimulus, Xuan said, stressing the importance of efforts to balance stable growth, employment and prices. 

At the same time, structural monetary policy tools will be used to improve support in key fields, including carbon reduction, technological innovation, the construction of a modern industrial system, major infrastructure and projects, and rural revitalization, to achieve a high-level dynamic equilibrium between effective supply and demand, according to Xuan. 

"As China's COVID-19 prevention and control measures have been optimized and the economic cycle has recovered, the confidence and vitality of market players will gradually return," Xuan said. "We will continue to boost market confidence and invigorate market entities." 

The country will reduce enterprises' comprehensive financing costs and the costs of individual consumption to boost both consumption and investment. It will guide financial institutions to shore up support for manufacturing companies, as well as private and smaller services firms. 

Bulk consumption related to housing and automobiles will be encouraged, and services consumption in the fields of education, culture and sports will be supported, Xuan said.

Source(s): Xinhua News Agency

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