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Source: CCTV

[CCTV] Authoritative Interview | Exclusive Interview with Pan Gongsheng, Secretary of the Party Committee and Governor of the People's Bank of China

The Third Plenary Session of the 20th CPC Central Committee proposed to speed up the improvement of the central bank system. Regarding this work, what specific arrangements does the People's Bank of China have? The reporter interviewed Pan Gongsheng, Party Secretary and Governor of the People's Bank of China.

Pan Gongsheng said that the first task of the Third Plenary Session of the 20th CPC Central Committee on financial system reform is to speed up the improvement of the central bank system, which is a systematic project. The People's Bank of China will improve the dual-pillar regulatory framework of monetary policy and macro-prudential policy to achieve the dual goals of currency stability and financial stability.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:Improve the framework of modern monetary policy with Chinese characteristics. This includes the target system, implementation mechanism, and transmission mechanism of monetary policy, maintain currency stability, and better promote high-quality economic development. We will gradually reduce the focus on quantitative targets, pay more attention to the role of price-based regulatory tools such as interest rates, enrich the monetary policy toolbox, improve the policy communication mechanism, and increase the transparency of monetary policy.

Pan Gongsheng said that to improve the central bank system, it is also necessary to improve the macro-prudential policy framework and the systemic financial risk prevention and disposal mechanism to keep the bottom line of no systemic financial risk. The third is to improve the financial market and financial market infrastructure system and deepen the structural reform of the financial supply side.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:We will strengthen the construction of financial market systems and strive to build a standardized, transparent, open, dynamic and resilient financial market. We will build an independent, controllable, safe and efficient financial market infrastructure system, which is the basis for the central bank to perform its macroeconomic regulation duties.

In addition, we must build a new open financial system at a higher level, steadily and prudently promote the internationalization of the RMB, and actively participate in global economic and financial governance and cooperation.

Pan Gongsheng introduced that at present, my country's banking assets rank first in the world; the bond market ranks second in the world; and the foreign exchange reserves have been ranked first in the world for 19 consecutive years. Digital finance, green finance, and inclusive finance are at the forefront of the world. The weight of the RMB in the Special Drawing Rights currency basket of the International Monetary Fund ranks third. All these have laid a good foundation for accelerating the improvement of the central bank system.

Comprehensive measures to support the recovery of the real economy

As one of the important means of macroeconomic policy, monetary policy has attracted much attention from the society. The Third Plenary Session of the 20th CPC Central Committee proposed that high-quality development is the primary task of building a modern socialist country in an all-round way. So, how will monetary policy support the recovery and high-quality development of the real economy?

Pan Gongsheng introduced that since the beginning of this year, the People's Bank of China has adhered to a prudent monetary policy that is flexible, moderate, precise and effective, and has implemented three relatively major monetary policy adjustments in February, May and July. It has adopted comprehensive measures in the total amount, structure, and transmission of monetary policy, and used a variety of monetary policy tools such as lowering the reserve requirement ratio, lowering the policy interest rate, and guiding the loan market benchmark interest rate downward to create a good monetary and financial environment.

At the same time, we will set up re-loans for technological innovation and technological transformation to increase financial support for technological innovation and equipment upgrading and transformation. We will reduce the down payment ratio and mortgage loan interest rate, lower the provident fund loan interest rate, and set up re-loans for affordable housing to accelerate the destocking of existing commodity housing in a market-oriented manner.

In addition, we will improve the efficiency of fund use and facilitate the transmission of monetary policy by rectifying and standardizing manual interest payments and idle capital.

Data shows that at the end of July, the scale of social financing increased by 8.2% year-on-year, and RMB loans increased by 8.7% year-on-year, which was about 4 percentage points higher than the nominal GDP growth rate. The average interest rate of new loans was around 3.6%, which was at a historical low.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:We will continue to maintain a supportive monetary policy stance, strengthen counter-cyclical and cross-cyclical adjustments, focus on stabilizing expectations, boosting confidence, and supporting the consolidation and strengthening of the economic recovery. In the regulation of monetary policy, we will focus on grasping and handling the relationship between the short-term and the long-term, between stabilizing growth and preventing risks, and between the internal and external aspects.

Pan Gongsheng said that in the next step, the prudent monetary policy should be more flexible, moderate, precise and effective, increase the intensity of regulation, accelerate the implementation of the financial policy measures that have been issued, maintain a reasonable level of liquidity, guide the reasonable growth of money and credit, promote a steady decline in corporate financing and residents' credit costs, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:We will further enhance the effectiveness of monetary policy in promoting economic structural adjustment, transformation and upgrading, and the conversion of old and new drivers, guide financial institutions to increase credit support for key areas and weak links, and meet reasonable consumer financing needs in a more targeted manner. At the same time, we will study reserve increment policy measures, enhance the coordination and cooperation of macroeconomic policies, support proactive fiscal policies to achieve better results, and unswervingly complete the annual economic and social development goals and tasks.

Do a good job in the "five major articles" of finance

The Third Plenary Session of the 20th CPC Central Committee proposed to "actively develop science and technology finance, green finance, inclusive finance, pension finance, and digital finance, and strengthen high-quality financial services for major strategies, key areas, and weak links."

In this regard, Pan Gongsheng stated that doing a good job in the "five major articles" of finance is an important focus of financial services for the high-quality development of the real economy.

Pan Gongsheng said that in recent years, with the continuous increase in financial support, the average annual growth rate of my country's inclusive small and micro loans, green loans, medium- and long-term loans for high-tech manufacturing, and loans for technology-based small and medium-sized enterprises has been around 20% to 30% in the past five years, significantly higher than the average growth rate of all loans.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:Financing availability has been significantly improved. Financing costs are at a historical low. At the same time, my country's online finance and mobile finance have developed rapidly, playing an important role in improving transaction efficiency, reducing transaction costs, and enhancing financial inclusion, becoming one of the highlights of my country's financial development.

Data shows that at present, the number of inclusive credit accounts for small and micro enterprises in my country exceeds 60 million, covering about one-third of business entities; the loan approval rate for technology-based small and medium-sized enterprises is close to 50%. In June, the weighted average interest rate of newly issued loans to private enterprises was less than 4%.

Pan Gongsheng said that in the next step, the People's Bank of China will strengthen its coordination and cooperation with industry management departments such as industry and information technology, science and technology, and environmental protection to further enhance the intensity, sustainability, and professional level of financial support, strengthen top-level policy design, strengthen positive incentives, enhance the service capabilities of financial institutions, broaden financing channels, and guide financial institutions to do a good job in the "five major articles" of finance.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:The People's Bank of China will focus on key areas and weak links such as major national science and technology projects and small and medium-sized technology companies, give full play to the role of re-lending for scientific and technological innovation and technological transformation, and work with relevant departments to cultivate a financial market ecology that supports scientific and technological innovation, improve the venture capital "fundraising, investment, management, and exit" mechanism, guide financial capital to invest early, invest in small and long-term investments, and invest in hard technology to meet the financing needs of technology-based companies at different stages of their life cycle, continuously improve the ability, intensity and level of financial support for scientific and technological innovation, and provide strong financial support for achieving high-level scientific and technological self-reliance.

Orderly resolve financial risks in key areas

Preventing and defusing financial risks, especially preventing systemic financial risks, is a fundamental task of financial work and an eternal theme of financial work. How healthy is my country's financial system at present? What new progress has been made in defusing risks in key areas?

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:At present, my country's financial system is generally sound. The People's Bank of China will conscientiously implement the arrangements of the Third Plenary Session of the 20th CPC Central Committee and firmly maintain the bottom line of preventing systemic financial risks.

How to keep the bottom line? Pan Gongsheng introduced that at the macro level, it is necessary to grasp the dynamic balance between economic growth, economic structural adjustment and financial risk prevention. At the same time, it is also necessary to effectively improve the effectiveness of financial supervision, strengthen regulatory coordination, form a joint regulatory force, and bring all types of financial activities under supervision according to law.

Pan Gongsheng also focused on introducing the latest situation of orderly resolution of risks in three key areas: local government debt, real estate, and small and medium-sized banks.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:In terms of resolving the debt risks of financing platforms, important progress has been made. The number of financing platforms and the level of existing debts have continued to decline. Most of the matured debts of financing platforms have been continued, reorganized and replaced, and the financing cost burden has been significantly reduced compared with before. In terms of financial support for the resolution of real estate risks, comprehensive measures have been taken from both the supply and demand sides, the down payment ratio of mortgage loans and mortgage loan interest rates have been lowered many times, and affordable housing re-loans have been established to support the acquisition of existing commercial housing, accelerating the construction of a new model for real estate development. In terms of resolving the risks of small and medium-sized financial institutions, the number of high-risk small and medium-sized banks has been reduced by nearly half from the peak.

Pan Gongsheng also introduced that the People's Bank of China will promote the acceleration of relevant legislation on financial stability, advance the construction of a financial stability guarantee system, strengthen the guarantee of risk management resources, effectively safeguard financial security, and effectively prevent systemic financial risks.

Promote high-level financial opening up from five aspects

The Third Plenary Session of the 20th CPC Central Committee proposed promoting high-level financial opening-up, steadily and prudently advancing the internationalization of the RMB, and developing the RMB offshore market.

Financial openness is an inevitable requirement for building a financial powerhouse. How will the People's Bank of China implement it specifically?

Pan Gongsheng introduced that the People's Bank of China will adhere to the market-oriented, rule of law and internationalization orientation, enhance the transparency, stability and predictability of financial opening-up policies, continue to promote high-level financial opening-up, and focus on doing well in five aspects.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:First, we will deepen the institutional opening-up in the financial sector and orderly promote the high-level opening-up of the financial services industry and financial markets. Second, we will steadily and prudently promote the internationalization of the RMB. We will continue to improve cross-border RMB policies based on market-driven and independent choices.

At the same time, the People's Bank of China will also support the construction of Shanghai International Financial Center, give full play to the role of Shanghai Regional Center of the International Monetary Fund, enhance the exchange and coordination of macroeconomic policies among countries in the Asia-Pacific region, continue to deepen financial cooperation between the mainland and Hong Kong, strengthen Hong Kong's function as a hub for offshore RMB business, and consolidate and enhance Hong Kong's status as an international financial center.

In addition, the People's Bank of China will create a more friendly and inclusive business environment, coordinate the reform of cross-border RMB and foreign exchange management, improve the level of cross-border trade and investment and financing facilitation, and continuously improve the level of payment services.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:The work of promoting payment convenience for foreigners in China has achieved remarkable results. Foreigners in China can flexibly choose a variety of payment methods such as bank cards, cash, and mobile payments. We will continue to do a good job in related work and provide foreigners in China with better quality, more efficient and convenient payment services.

Pan Gongsheng introduced that the People's Bank of China will continue to rely on the G20, the International Monetary Fund, the Bank for International Settlements and other platforms to deeply participate in international financial governance, promote global macroeconomic and financial policy coordination, implement the consensus reached by the leaders of China and the United States in the San Francisco meeting, and take the lead in the work of the China-US and China-EU financial working groups.

Pan Gongsheng, Party Committee Secretary and Governor of the People's Bank of China:The development experience of China's financial market shows that expanding opening-up is a powerful driving force and important guarantee for high-quality financial development, and a key measure to enhance the ability to serve the real economy and international competitiveness. We will unswervingly do a good job in all aspects of financial opening-up.

The latest data shows that as of the end of July, overseas investors held 4.5 trillion yuan of Chinese bonds, a record high.