Monetary Policy Committee Held Its First Quarterly Meeting

The monetary policy committee of the PBC convened its first quarterly meeting in 2010 in Beijing days ago.

After discussion, representatives held that China is facing complex economic and financial situations both at home and abroad. With positive changes in global economy on a rise, the momentum of stabilization and recovery in China will further take hold. However, difficulties and structural problems still remain in China s economic and social development, making it more pressing for China to shift growth pattern and restructure the economy. The task of controlling money and credit aggregates, optimizing credit structure and preventing financial risks is still arduous.

It was put forward on the meeting that, according to the overall arrangements of the State Council, continued efforts would be made to implement a relatively easy monetary policy and strike a balance between maintaining stable and fairly rapid economic development, restructuring and managing inflation expectations.

Consistency and stability of policy conducts will be kept whereas their intensity, pace and focus will be flexibly handled to enhance the targeting of such policies to enable the financial sector to support economic development in a more sustainable manner and maintain the healthy and stable operation of the financial system.

The meeting stressed that a mix of monetary policy tools would be adopted to maintain adequate liquidity in the banking system and to guide reasonable increase of money and credit supply. Continued efforts would be made to improve the internal governance structure of commercial banks. Effective performance assessment system and risk management system should be in place so that commercial banks would attend to both near-term and long-term development goals, manage balanced credit extension throughout the year.

It was also emphasized that greater financial support will be extended to shifting growth pattern and restructuring the economy. A differentiated credit policy will be carried out to optimize credit structure, by strengthening credit support to weak links in economic and social development such as employment, emerging strategic industries, industrial shift, agriculture and SMEs whereas restricting the loans extended to high-pollution and high-emission industries, industries with overcapacities and newly started projects.

Direct financing will be expanded to promote the development of the financial market. Further studies will be conducted on establishing a macro-prudential regulatory system to prevent and mitigate potential systemic risks.

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. Su Ning, Ms. Hu Xiaolian, Mr. Li Yong, Mr. Yi Gang, Mr. Liu Mingkang, Mr. Shang Fulin, Mr. Zhou Qiren, Mr Xia Bin and Mr. Li Daokui. Mr. You Quan, Mr. Zhu Zhixin, Mr. Ma Jiantang, Mr. Wu Dingfu and Mr. Jiang Chaoliang were absent from the meeting on business leaves. Presidents of the PBC Nanjing Branch, Wuhan Branch and Beijing Operations Office joined the meeting as non-members.