The Monetary Policy Committee of the People s Bank of China (PBC) held its third quarterly meeting in 2009 in Beijing days ago.
After analyzing domestic and global economic and financial developments, the Committee held that policy measures adopted to address the international financial crisis have produced remarkable results, with investment growth accelerating, consumption expanding rapidly, and domestic demand playing a greater role in driving economic growth.
Liquidity in the banking system remains adequate, money and credit supply grows rapidly, and the financial system functions in a stable manner. However, economic stabilization and recovery is not firmly established. Weak external demand poses enormous pressures, domestic demand expansion faces multiple constraints, some industries and enterprises experience operation difficulties, and economic restructuring remains an arduous task.
It was noted at the meeting that efforts should be made to thoroughly implement the scientific outlook on development, to continue to promote sound and rapid economic growth as the priority of economic work, to implement and improve the policy package and relevant policy measures, and to further enhance the momentum of economic stabilization and recovery.
Efforts should be made to increase the contribution of domestic demand, household consumption in particular, to economic growth, to shift development pattern, and to speed up strategic adjustment of economic structure. The coordination between monetary policy and fiscal, industrial, trade and financial regulatory policies should be strengthened so as to maintain sound and rapid economic development.
In the next quarter, the PBC will follow the State Council s decisions on macroeconomic management, continue the relatively easy monetary policy, and maintain policy continuity and stability. The PBC will improve the transmission mechanism of monetary policy, ensure adequate liquidity in the banking system, and guide money and credit supply to grow in a manner commensurate with economic growth.
It will continue to improve the credit structure, step up financial support to agriculture, rural areas, farmers, SMEs and other weak links, develop consumer credit, support the adjustment and revitalization of key industries and the development of emerging strategic industries, and promote independent innovation, mergers and reorganization, industrial relocation and balanced development across regions.
The PBC will impose strict controls over lending to highly energy-consuming and heavily polluting industries and enterprises with excess capacity. It will press ahead with financial reform and innovation, strengthen risk management, and make financial institutions more resilient.
Mr. Zhou Xiaochuan, Governor of the PBC and Chairman of the Monetary Policy Committee, chaired the meeting. Other Committee members, including Mr. Su Ning, Ms. Hu Xiaolian, Mr. Ma Jiantang, Mr. Yi Gang, Mr. Liu Mingkang, Mr. Shang Fulin, Mr. Wu Dingfu, Mr. Jiang Chaoliang and Mr. Fan Gang attended the meeting. Mr. You Quan, Mr. Zhu Zhixin and Mr. Li Yong were absent from the meeting on business leaves. Presidents of the PBC Tianjin Branch, Shenyang Branch and Chengdu Branch also joined the meeting.
