PBC vows well-calibrated monetary policy to bolster sustained economic recovery

File photo shows an exterior view of the People's Bank of China in Beijing, capital of China. (Photo: Xinhua)

China's central bank vowed to implement a well-calibrated, moderately accommodative monetary policy to foster a favorable monetary and financial environment that supports the sustained economic recovery, during a meeting held by China's top legislature, the Xinhua News Agency reported on Sunday.

'The Standing Committee of the 14th National People's Congress (NPC) held the third plenary meeting of its 18th session in Beijing on Sunday, during which Pan Gongsheng, People's Bank of China (PBC) governor, delivered a report on the country's financial work on behalf of the State Council, according to Xinhua.

Pan's report outlined the major progress and achievements in financial sector since November 2024, analyzed the current economic and financial situation and challenges, and proposed plans for the next phase of work.

The PBC will implement a moderately accommodative monetary policy in a more precise and effective manner to foster a sound monetary and financial environment that supports the sustained recovery of the economy, according to Pan.

Meanwhile, it will further strengthen and refine financial regulation to improve its quality and efficiency; focus on key areas in serving the real economy by providing high-quality financial services; continue to deepen the supply-side structural reform in the financial sector; advance high-level two-way opening-up in finance while safeguarding national financial security; and prevent and defuse financial risks in key areas to maintain the bottom line of preventing systemic financial risks, according to Pan, Xinhua reported.

A Chinese expert noted that as one of China's two major macroeconomic policies, monetary policy and its accompanying financial support measures have played a crucial role in sustaining steady economic growth this year and achieving the annual growth target.

The meeting called for strengthening monetary policy regulation by enhancing its foresight, precision and effectiveness, and urged policymakers to calibrate the intensity and pace of policy implementation in line with domestic and international economic and financial developments as well as market conditions.

"This year's moderately accommodative monetary policy, implemented through a package of policy tools, has maintained ample liquidity in financial markets and the broader economy. The sufficient liquidity has effectively met the funding needs of enterprises and households, preventing potential shortfalls in investment and consumption, and thereby providing strong support for overall economic activity," Zhao Xijun, co-president of the China Capital Market Research Institute at Renmin University of China, told the Global Times on Sunday.

Zhao noted that the central bank's large-scale use of structural monetary policy tools this year has played a significant role in addressing weak links in the economy and supporting key strategic sectors. These tools have yielded notable results in promoting technological innovation, enterprise development and stable consumption, while also helping strengthen infrastructure, optimize the economic structure, and enhance the sustainability and resilience of China's growth, Zhao said.

Zhao said that the moderately accommodative monetary policy and financial support measures have played a key role in stabilizing growth, employment, markets and confidence. Their forward-looking and guiding nature has boosted market sentiment and expectations, contributing to stronger capital market performance and improved public confidence.

He added that since monetary policy adjustments were implemented on September 24 last year, their impact on stabilizing market confidence has been particularly evident. These measures have built a solid foundation for preventing systemic financial risks. Despite external uncertainties and shocks, such as US tariff hikes, China's economic fundamentals have remained resilient, with the domestic financial and capital markets generally stable —demonstrating the robustness and risk-resistance of the country's financial system, he stressed.

Before the PBC pledged to address the evolving economic and financial situation, the nation's robust performance in the first three quarters had already served as a strong response to recent macroeconomic challenges.

Recent data from the National Bureau of Statistics showed that the overall steady momentum of the Chinese economy remained unchanged in the first three quarters.

Economic growth, employment, prices and the balance of payments are the key indicators of macroeconomic performance. In terms of growth, China's GDP expanded by 5.2 percent year-on-year in the first three quarters, accelerating by 0.2 percentage points from the full-year figure and 0.4 percentage points from the same period last year, according to the NBS. The economy added 3.97 trillion yuan ($559 billion) in new output, 136.8 billion yuan more than a year earlier.