SHANGHAI/BEIJING, Oct 21 (Reuters) – China will focus on expanding domestic demand, promoting a sustainable economic recovery, while curbing financial risks, People’s Bank of China Governor Pan Gongsheng said in a statement on Saturday.
The central bank will make its policy more „precise and robust” while guiding financial institutions to lower real lending rates and lower funding costs for companies and individuals, Ban said in a statement posted on the bank’s website.
The report is significant because it is the first time the governor has commented on policies since the release of third-quarter economic data. It outlines the authorities’ near-term priorities and is presented to the country’s parliament.
Pan said efforts will be made to activate capital markets and boost investor confidence.
He pledged to „implement macro policy changes in response to changes in economic conditions, effectively strengthen financial supervision, focus on expanding domestic demand, boost confidence and contain risks, and promote sustainable recovery in the economy.”
China’s economy grew faster than expected in the third quarter, while consumption and industrial activity also surprised on the upside in September, with recent policy measures helping to boost a temporary recovery.
Ban said the country would keep the yuan stable, prevent the risk of abnormal fluctuations in cross-border financial flows and maintain stability in the foreign exchange market.
It will steadily push forward its yuan internationalization plan, establish a risk warning and control system for foreign investment, and safeguard the country’s foreign exchange assets.
It will guide financial institutions to address local government credit risks, including credit risks of local government financing vehicles, he said.
Ban also said in the statement that China will address the default risk of bonds of major real estate companies, prevent risk contagion in the stock, bond and foreign exchange markets, and ensure the stable functioning of financial markets. (Reporting by Casey Hall and Kevin Yao; Editing by David Holmes and Clelia Oziel)