The priorities include measures to promote green finance, expand the opening up of the financial system, deepen bond market reforms, and tackle financial system risk.
The PBOC (People’s Bank of China) has outlined its key policy priorities for 2021 at its annual work meeting on Monday (7 January).
The priorities were listed in ten categories, including:
- Maintaining a prudent and flexible monetary policy, including by deepening foreign exchange regulatory reforms and improving the interest rate formation and transmission mechanism to make lending and borrowing rates more market based
- Supporting small and micro enterprises, including agriculture and technology sectors, through monetary policy tools, credit policy, loan deferrals, and by offering cheap funding to financial institutions to support lending to the real economy
- Implementing carbon neutrality objectives, including by improving the green finance policy framework and related standards, bolstering the financial system’s ability to manage climate change-related risks, enhancing information disclosure requirements of financial institutions, establishing a carbon emissions trading market, promoting green financial products, and increasing international cooperation
- Improving the macro-prudential policy framework, including by enhancing stress testing systems, monitoring of systematic financial risks, management of cross-border capital flows and the regulatory system for financial holding companies
- Preventing and resolving financial risks, including by improving the deposit insurance system, prohibiting excessive marketing of financial products, promoting responsible financial innovation, and strengthening supervision of online platforms, payments firms and personal credit businesses
- Expanding the opening up of the financial industry, including by promoting global governance standards, controlling external financial risks, and promoting multilateralism
- Internationalising the RMB to promote trade and investment by improving policies and systems related to the use of the domestic currency, and promoting the development of offshore and onshore currency markets
- Deepening bond market reforms, including by enhancing the default resolution mechanisms, punishing illegal debt evasion and fraudulent bond issuance, improving supervision of real estate finance, bolstering governance of financial institutions, and improving the interoperability and standards of bond market infrastructure
- Improving foreign exchange management to facilitate investment in capital projects, including by promoting the use FX derivatives for risk management, cracking down on illegal activities in the FX markets, and maintaining the stability of FX reserves
- Improving standards for financial services, including by enhancing the legal system, modernising governance in the payment sector, improving regulatory policies for fintech development and digital finance, carrying out tests on the new digital RMB system, and improving the efficiency of AML monitoring and investigations
The annual work meeting featured speeches from PBOC governor Yi Gang and deputy governor Guo Shuqing.
A full readout is available here.
