The central bank: Continue to implement an appropriately accommodative monetary policy

    On August 1, the People's Bank of China convened its Work Conference for the Second Half of 2025 and the Meeting on Advancing the Regular and Long-Term Implementation of Rectification Measures Following the Central Inspection. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the meeting thoroughly implemented the spirit of the Political Bureau meeting and the decisions and arrangements of the Party Central Committee and the State Council. It reviewed work since the beginning of 2025, analyzed the current financial situation, and outlined tasks for the next phase. Pan Gongsheng, Secretary of the Party Committee and Governor of the People's Bank of China, attended the meeting and delivered remarks. Zhu Hesheng, Qu Jishan, Xuan Changneng, Lu Lei, Tao Ling, and Zou Lan also attended the meeting.

    The meeting noted that since the beginning of 2025, the People's Bank of China has earnestly implemented the arrangements made at the Central Economic Work Conference, the Political Bureau meeting, and the Government Work Report. It has strengthened analysis of the situation, prepared policy reserves, introduced a package of monetary policy measures, prudently addressed risks in key areas, deepened financial reform and opening-up, effectively safeguarded national financial security, and advanced the comprehensive and rigorous governance of the Party. All tasks have been carried out in a powerful and effective manner.

    First, financial support for the sustained improvement of the economy has been strengthened. A moderately loose monetary policy has been implemented, with reductions in the reserve requirement ratio and flexible use of various monetary policy tools to maintain ample liquidity. Policy interest rates, rates for structural monetary policy tools, and personal housing provident fund loan rates have been lowered to promote downward pressure on financial market interest rates and overall social financing costs. Efforts have continued to improve the monetary policy framework, cultivate policy interest rates, refine the monetary policy toolkit, enhance policy communication and expectation management, and consolidate and expand the achievements in addressing idle funds and “involutionary” competition within the financial sector.

    Second, enhance the quality and effectiveness of financial services in supporting economic structural transformation and high-quality development. Strengthen the coordinated implementation of the five major financial initiatives. Focus on supporting technological innovation, boosting consumption, small and micro enterprises, and stabilizing foreign trade. Enhance policy coordination by establishing a “Technology Board” in the bond market, creating risk-sharing instruments for technology innovation bonds, and introducing re-lending facilities for consumption and elderly care services. Increase quotas for re-lending facilities supporting technological innovation and technical transformation, as well as those supporting agriculture and small businesses. By the end of June, loans for technology, green initiatives, inclusive small and micro enterprises, elderly care industries, and digital economy industries grew by 12.5%, 25.5%, 12.3%, 43%, and 11.5% year-on-year, respectively.

    Third, financial risks in key areas have further converged. Significant progress has been made in resolving debt risks of financing platforms through financial support. Reforms and risk mitigation for small and medium-sized banks have advanced, with orderly resolution of financial risks in key institutions and regions. The People's Bank of China established the Macroprudential and Financial Stability Committee, continuously improving the macroprudential and financial stability safeguarding system. Macroprudential management of real estate finance was enhanced to support the accelerated development of a new real estate development model. Strong support was provided for the stable operation of capital markets, with optimized utilization of two capital market support tools and policy arrangements to better stabilize market expectations. Violations in the bond market were strictly investigated and punished. Supply chain finance operations, such as electronic accounts receivable financing, were standardized.

    Fourth, high-level opening-up of the financial sector has been steadily expanded. The development of the Cross-border Interbank Payment System (CIPS) has been continuously advanced. The Mainland-Hong Kong Faster Payment System (FPS) interconnection has been launched. Cross-border QR code payment interconnectivity with multiple countries has been achieved. Cross-border payment scenarios for digital renminbi and multilateral central bank digital currency bridges have been continuously enriched. Coordinated efforts in the layout of renminbi clearing banks, the development of offshore renminbi markets, bilateral currency swaps, and the cross-border use of renminbi have yielded positive progress. Reforms to facilitate banks' foreign exchange operations were deepened, promoting trade-related foreign exchange receipts and payments for high-quality enterprises and expanding the coverage and quality of integrated local and foreign currency cash pooling policies for multinational corporations. High-pressure crackdowns on illegal and non-compliant activities in the foreign exchange sector were maintained.

    Fifth, cooperation in global financial governance continued to deepen. Key outcomes from high-level diplomatic engagements were implemented to advance international financial cooperation. An annual meeting mechanism between the governors of the central banks of China and the EU was established, and practical cooperation within the China-EU Financial Working Group was advanced. We promoted the establishment of a new rapid financing tool under the Chiang Mai Initiative, funded by freely usable currencies including the renminbi.

    Sixth, financial management and service levels were further enhanced. We accelerated the revision of key legislation such as the People's Bank of China Law. Multiple financial reform and opening-up policies were implemented in Shanghai. We spearheaded the issuance of policy documents for free trade zones (ports) to align with international high standards in the financial sector. Comprehensively implement the statistical framework for the “Five Major Financial Initiatives,” establishing the first-ever comprehensive statistical panorama. Strengthen rigorous oversight of the payment market and precisely target the “funding chains” involved in fraud and gambling. Ensure cash supply and optimize cash services. Continue advancing the research, development, and application of digital renminbi. Achieve new progress in the National Treasury Project. Enhance management of the credit reporting industry and optimize the market layout. Continuously improve supporting regulations for the Anti-Money Laundering Law.

    Seventh, the Party's comprehensive and rigorous governance has been deepened. We have continuously strengthened the Party's theoretical armament through innovation, strictly implementing the “first agenda item” system. We have conducted high-quality education on thoroughly implementing the spirit of the Central Committee's eight-point decision, earnestly investigating and rectifying violations related to excessive dining and entertainment. We have rigorously and pragmatically advanced inspection rectification, establishing and improving six mechanisms: organizational leadership, work briefings, acceptance and closure, supervision and implementation, on-site inspections, and daily oversight. We have conducted comprehensive on-site supervision of provincial branches and their subordinate units. Deeply implement the Party's organizational line for the new era, continuously strengthening the construction of leadership teams and the cadre and talent pool. Internal management has become more standardized, with trade unions and the Communist Youth League effectively serving as bridges connecting with the masses. The quality and efficiency of work related to retired cadres, logistics, and security have been enhanced. Management of subordinate units has been comprehensively strengthened by formulating and revising management measures and relevant institutional provisions, establishing a “1+N+X” institutional framework. Regular Party discipline education has been conducted, with system-wide warning education meetings held. Supervision and restraint mechanisms for power operations in key areas and sectors have been continuously improved, and efforts to uphold integrity, enforce discipline, and fight corruption have been sustained.

    The meeting emphasized that the People's Bank of China system must earnestly study and grasp the spirit of General Secretary Xi Jinping's important speech at the Political Bureau meeting on the current economic situation and economic work for the second half of the year. It must align its thinking and actions with the Party Central Committee's analysis, judgment, and decisions on the economic situation. Adhere to the general principle of pursuing progress while ensuring stability, fully and accurately implement the new development philosophy, meticulously execute the moderately accommodative monetary policy, and intensify support for technological innovation, consumption stimulation, small and micro enterprises, and foreign trade stabilization. Further deepen financial reforms and high-level opening-up, prevent and defuse financial risks in key areas, diligently advance all key tasks in the second half of the year, and promote high-quality economic development.

    First, continue to implement a moderately accommodative monetary policy. Employ a comprehensive range of monetary policy tools to maintain ample liquidity, guide financial institutions to sustain reasonable credit growth, and ensure that the growth of social financing and money supply aligns with the expected targets for economic growth and overall price levels. Ensure the effective implementation of all monetary policy measures, smooth monetary policy transmission, and enhance the effectiveness of monetary policy execution. Optimize the utilization of existing funds and make effective use of new funds to improve capital efficiency. Strengthen the implementation and supervision of interest rate policies. Maintain exchange rate flexibility, strengthen expectation guidance, and guard against risks of excessive exchange rate fluctuations.

    Second, prioritize serving the real economy. Advance the five major financial initiatives and guide financial institutions to enhance the professionalism and precision of financial services. Leverage re-lending policies for technological innovation and technical transformation to promote faster loan growth for technology-based SMEs, and increase financing support for key sectors such as “two major areas” and “two new sectors.” Support the resolution of structural contradictions in key industries to promote industrial upgrading and quality improvement. Reasonably meet the financing needs of foreign trade enterprises. Strengthen supervision and risk prevention for electronic accounts receivable voucher operations.

    Third, prevent and resolve financial risks in key areas. Continue to provide financial support for local government financing platforms' debt resolution. Orderly advance risk resolution in key regions and institutions. Further enhance risk monitoring, assessment, and macroprudential management.

    Fourth, steadily and prudently advance RMB internationalization. Accelerate the expansion of RMB usage in trade. Further enhance the RMB's financing currency function, optimize integrated RMB and foreign currency cash pooling, and refine management policies for domestic enterprises listing overseas. Develop offshore RMB markets to foster stable, multi-tenor liquidity channels. Strengthen policy support and oversight for clearing banks while accelerating the optimization of their network layout.

    Fifth, advance financial market reform and opening-up. Promote the development of the “Science and Technology Board” in the bond market and the use of risk-sharing instruments for science and technology innovation bonds, expanding their issuance scale. Improve the institutional framework for financial markets and infrastructure, accelerating the formulation and revision of laws such as the Bill of Exchange Law and regulations on corporate bonds. Deepen reforms in trade foreign exchange business management and actively promote cross-border investment and financing facilitation.

    Sixth, deepen international financial cooperation. Intensify multilateral and bilateral international monetary and financial cooperation. Deeply engage in global financial governance, actively advance global macroeconomic policy coordination, participate in the formulation of international financial rules, continue to promote quota reforms at the International Monetary Fund, and improve the governance structures of international financial organizations.

    Seventh, continuously enhance financial management and service levels. Coordinate the advancement of key legislative and amendment projects, and promote administrative law enforcement in a standardized and efficient manner. Deepen the statistical work on the “Five Major Financial Initiatives.” Research and formulate the People's Bank of China's 15th Five-Year Plan for reform and development. Ensure the implementation of key tasks in building a digital central bank. Construct a secure and efficient cross-border payment system. Orderly advance the interconnection of rapid payment systems. Establish a comprehensive governance and protection network targeting the “funding chains” of fraud and gambling. Improve cash services and management. Strengthen the infrastructure and promotion of the digital renminbi. Accelerate the construction of the National Treasury Project to ensure the stable and orderly operation of treasury services. Diligently carry out all tasks for the fifth round of anti-money laundering assessments.

    The meeting emphasized that the People's Bank of China system must routinely and effectively advance the rectification of issues identified in the central inspection, and deepen the comprehensive and strict governance of the Party. Guided by political development, it must thoroughly study and comprehend General Secretary Xi Jinping's important thoughts on Party building and the Party's self-revolution, strictly implement the CPC Central Committee's decisions on strengthening Party building within the financial system, and consistently uphold the political and people-oriented nature of financial work. It must expedite and solidify rectification efforts following the central inspection, placing greater emphasis on drawing lessons from specific cases, integrating solutions, ensuring practical results, and fostering top-down coordination. It should advance the rectification of issues identified through central inspections, audits, and feedback from the Central Financial Work Commission in a unified manner. We upheld the standards of loyalty, integrity, responsibility, diligence, pragmatism, and professionalism to build a capable cadre and talent pool. We strengthened internal audit oversight, centralized procurement, security, and other functions to continuously enhance the quality and efficiency of internal management. We intensified oversight of subordinate units. We deepened efforts to foster a positive work ethic, enforce discipline, and combat corruption. We rigorously implemented the study and education campaign on the spirit of the Central Committee's eight-point decision, intensified the crackdown on excessive dining and entertainment, and earnestly implemented regulations to reduce burdens on grassroots units. We advanced our undertakings through exemplary conduct and strict discipline.

    The meeting was held via video conference. Attendees included members of the State Administration of Foreign Exchange's leadership team; responsible officials from all departments, branches, and subordinate units of the People's Bank of China; and responsible officials from the dispatched discipline inspection and supervision teams. Relevant officials from the Office of the Central Financial and Economic Affairs Commission, the Central Financial Work Committee, the General Office of the State Council, and the National Audit Office were invited to attend.