Lending rates at historic lows, a stronger Renminbi, and a sweeping clean-up of local debt risks: China's latest financial work report, delivered by central bank Governor Pan Gongsheng to the National People's Congress (NPC) Standing Committee this week, offers a window into how the world's second-largest economy is steadying its financial system while opening it wider to the world.

Members of the 14th NPC Standing Committee put forward targeted suggestions to boost market confidence, support small businesses and advance financial opening-up during panel deliberations.

Risk cleanup

The report showed the number of remaining local government financing vehicles (LGFVs) by end-September had fallen 92% from March 2023 levels, by end-June, their operational financial debt was down 79% over the same base period. A dedicated real estate financing coordination mechanism has approved over 8.4 trillion yuan of loans to support the sector’s smooth transition. But deputies warned of lingering risks. Shi Yaobin, Vice-Chairperson of the Financial and Economic Affairs Committee of the 14th NPC, called for continuous monitoring of stripped LGFVs, noting many lack sustainable market viability and still carry legacy debt risks. Jiang Zhuoqing，Vice-Chairperson of the Supervision and Judicial Committee of the 14th NPC, urged a full nationwide risk assessment of small and medium-sized financial institutions, with clearer responsibility frameworks for local risk disposal.

Low rates, real reach

On monetary policy, China has maintained a moderately loose stance, driving 7.1% year-on-year growth in outstanding aggregate financing and 7.2% in broad M2 money supply by September. New corporate loan rates hit a historic low of 2.96%, with 33 trillion yuan of new social financing channeled to the real economy. Cai Ling, member of the 14th NPC’s Financial and Economic Affairs Committee, pushed for more concrete data and targeted policy tools for financial support in clearing inter-enterprise payment arrears, a core burden on private and small firms.

Wu Jing，member of the 14th NPC Standing Committee, stressed quality over quantity, urging banks to move beyond "hitting numerical targets" and ensure credit actually reaches private, small and tech firms that are the economy's weakest links.

Steadying the Market 

The report also outlined tightened financial regulation and measures to guide long-term capital into equity markets, amid divergent performance across stock segments.

Zhang Daohong，Vice-Chairperson of the 14th NPC’s Education, Science, Culture and Public Health Committee，proposed refining the market stabilization mechanism with more timely, transparent communication to dispel rumors such as “national team withdrawal”, and diversified intervention to balance index stability and high-growth sector support, improving retail investor returns. Zhu Mingchun, member of the Financial and Economic Affairs Committee of the 14th NPC, highlighted the historic shift toward fast-growing direct financing, calling for stricter algorithmic trading oversight and better investor protection. He further proposed a public long-term growth fund  drawing on global pension and sovereign wealth fund models, so ordinary savers can steadily share capital market gains rather than chase short-term swings.

Opening-up widens

On high-level opening-up, the report cited expanded foreign institutional access, growing RMB cross-border use and advancing Shanghai-Hong Kong financial connectivity. Jiang Zhuoqing called for advancing Renminbi internationalization in lockstep with Chinese firms going global, and expanding the CIPS cross-border payment network to build financial resilience under extreme scenarios.

Looking ahead, the report sets five priorities: keeping monetary policy supportive and liquidity ample, tightening regulation, better serving the real economy, deepening reform and opening-up, and guarding the bottom line of no systemic risk.

For global investors, the throughline is unmistakable: China is betting that stability at home and predictability abroad, is its most valuable financial asset.