The Monetary Policy Committee of the People's Bank of China (PBC) held its fourth quarterly meeting of 2008 in Beijing days ago.
In the meeting, participants analyzed current economic and financial situation and focused on the potential impact of the international financial crisis on China s economic and financial development. The Committee held that efforts should be stepped up to monitor the international financial crisis and to improve the policy response mechanism to ensure safe and stable performance of the financial system.
It was noted that though China s economic development was confronted with difficulties and challenges from home and abroad, the fundamentals and the long-term trend of the economy remained unchanged. Efforts should be made to thoroughly implement the scientific outlook on development and, with a view to expanding domestic demand, to accelerate the shift of development strategy and economic restructuring.
The coordination of monetary policy with fiscal policy, industrial policy, foreign trade policy and financial regulatory policy should be strengthened to maintain stable and relatively rapid economic growth.
Weighing the monetary policy stance and measures to be taken in the next stage, the Committee held the view that efforts should be made to earnestly carry out the macro control decisions made by the CPC Central Committee and the State Council, to implement moderately loose monetary policy and to extend greater financial support to economic growth.
Efforts should be made to maintain adequate liquidity in the banking system and to promote the stable money and credit growth. In line with the principles of differentiated policies to different sectors, greater credit support should be given to projects aimed to improve social welfare, SMEs, agriculture, rural areas and farmers, major construction projects, post-disaster reconstruction, energy conservation and emission reduction, scientific and technological innovation, technical upgrading, mergers & acquisitions as well as balanced regional development.
The principle of making the RMB exchange rate reform a self-initiated, controllable and gradual process should be followed to further improve the formation mechanism of RMB exchange rate and to keep the exchange rate basically stable at an adaptive and equilibrium level. The foreign exchange administration system should be improved to vigorously advance trade and investment facilitation.
Financial reform and innovation should be pressed ahead to improve the competitiveness of financial institutions and the efficiency of the financial markets in resources allocation, and to streamline the transmission mechanism for the conduct of moderately loose monetary policy.
Mr. Zhou Xiaochuan, Governor of the PBC and Chairman of the Monetary Policy Committee, chaired the meeting. Other Committee members present at the meeting included Mr. Li Yong, Mr. Su Ning, Mr. Yi Gang, Mr. Ma Jiantang, Ms. Hu Xiaolian, Mr. Liu Mingkang, Mr. Wu Dingfu, Mr. Jiang Chaoliang and Mr. Fan Gang. Mr. You Quan, Mr. Zhu Zhixin and Mr. Shang Fulin were absent from the meeting on business leaves. Presidents of the PBC Ji nan Branch, Guangzhou Branch and Xi an Branch also joined the meeting.
