The National Development and Reform Commission, the Ministry of Finance, and the Central Bank have made a concerted statement to release a heavy signal

China Business Daily (Reporter Ma Wenbo) On March 21, the State Council New Office held a press conference, at which relevant responsible persons such as the National Development and Reform Commission, the Ministry of Finance, and the People's Bank of China introduced recent investment, finance, and financial related data and policies. At the meeting, the relevant person in charge said that the mainland will continue to adhere to the prudent monetary policy, maintain a reasonable growth and stable pace of money, credit and financing, make overall plans and make good use of policy tools, promote the steady growth of investment throughout the year, and promote the sustained economic rebound and long-term improvement.

The photo shows citizens passing by the People's Bank of China in Beijing. (PHOTO COURTESY OF CNSPHOTO)

Monetary policy remains prudent

The Central Economic Work Conference held in December last year and this year's "Government Work Report" both stressed the need to maintain a prudent monetary policy. At the press conference, Xuan Changneng, deputy governor of the People's Bank of China, said that the mainland's monetary policy has sufficient policy space and rich tool reserves, and in the next stage, the prudent monetary policy will continue to be flexible, moderate, precise and effective.

Zhu Keli, executive director of the China Information Association and founding president of the National Research Institute of New Economy, told China Business Daily that in the current economic environment, the importance of monetary policy is self-evident, which is not only an important means to regulate economic operation, but also a key force to promote the recovery of the real economy. In recent years, the mainland's monetary policy has continued to provide solid and strong support for the real economy, showing the characteristics of flexibility, moderation, precision and effectiveness. This year's "Government Work Report" once again emphasizes the orientation of monetary policy, indicating that monetary policy will continue to play an important role in the coming period.

Xuan Changneng said that in recent years, the requirement of prudent monetary policy is to maintain reasonable and abundant liquidity, to achieve the scale of social financing, money supply to match the expected targets of economic growth and price levels, and to achieve the statutory goals. In achieving its goals, the PBOC will use a combination of monetary policy tools, including reserve requirement ratios, relending, and open market operations. The specific tools to use need to be combined with the needs of different situations, and the amount will be more or less, and the overall purpose is to create a good monetary and financial environment.

Zhu Keli said in his analysis that in the regulation and control of monetary policy, it is very important to balance the relationship between short-term and long-term, between stable growth and risk prevention, and between internal equilibrium and external equilibrium. This requires that when formulating and implementing monetary policy, we should not only take into account the current economic situation and demand, but also take into account the future development trend and goals; maintain stable economic growth while effectively guarding against and defusing various risks; pay attention to the balance of the domestic economy as well as the changes and impacts of the international economic environment.

In addition, Zhu Keli believes that strengthening counter-cyclical and cross-cyclical adjustment is another important direction of monetary policy. Countercyclical adjustment is the use of opposite policy measures to smooth economic fluctuations at different stages of the economic cycle. Cross-cyclical adjustment, on the other hand, pays more attention to maintaining policy continuity and stability between multiple economic cycles to achieve long-term stable economic growth. This requires a forward-looking and strategic vision in formulating monetary policy, which can lay a solid foundation for future economic development while addressing current economic challenges.

Strengthen credit support for the real economy

Xuan Changneng said that since the beginning of this year, the overall economic rebound is improving, in addition to paying attention to the total amount, but also pay more attention to guiding financial institutions to credit smoothly, from the first two months of financial data, the early guidance has produced an effect, is expected this year's financial support for the real economy will be more sustainable.

In February this year, the loan prime rate (LPR) for loans with a maturity of more than 5 years fell by 0.25 percentage points, the largest decline since the LPR reform, effectively driving the continuous decline in loan interest rates. Judging from the credit data in the first two months of this year, the mainland's total credit volume continued to maintain a steady and relatively rapid growth. At the end of February, the balance of RMB loans of financial institutions was 243.96 trillion yuan, a year-on-year increase of 10.1%.

The credit structure continued to be optimized, the credit growth of key industries of the national economy remained high, and more financial resources flowed to the weak links of the national economy. At the end of February this year, the balance of medium and long-term loans in the manufacturing industry increased by 28.3% year-on-year, of which the balance of medium and long-term loans in the high-tech manufacturing industry increased by 26.5% year-on-year, the medium and long-term loans in the infrastructure industry increased by 14% year-on-year, and the balance of loans to high-tech, "specialized, special and new" and science and technology small and medium-sized enterprises increased by 14.2%, 18.5% and 21.4% year-on-year respectively, which were significantly higher than the growth rate of various loans of 10.1% in the same period.

In addition, at the end of February, the balance of inclusive small and micro loans increased by 23.1% year-on-year, an increase of 1 trillion yuan in the first two months, and an increase of 110.2 billion yuan year-on-year. Loans to the private economy showed an increasing trend. At the end of February, the balance of loans to the private economy increased by 11.6% year-on-year, 1.5 percentage points higher than the growth rate of various loans in the same period.

Xuan Changneng said that at the end of February, the balance of loans reached 244 trillion yuan, mainly reflecting the balance of M2 (broad money supply) deposits of enterprises and residents as high as 300 trillion yuan. At present, the scale of the mainland's monetary and credit stock is large enough, and with the improvement of the efficiency of economic restructuring, transformation and upgrading, and the conversion of old and new kinetic energy, the efficiency of the use of stock resources will be significantly improved, which can better support high-quality economic development. At the same growth rate, financial support for the real economy remains solid.

Improve the efficiency of government investment

This year's "Government Work Report" proposes that starting from this year, it is planned to issue ultra-long-term special treasury bonds for several consecutive years, which will be specially used for the implementation of major national strategies and security capacity building in key areas, and all sectors of society are very concerned about the timing and use of ultra-long-term special treasury bonds.

Liu Sushe, deputy director of the National Development and Reform Commission, said that with regard to ultra-long-term special treasury bonds, the National Development and Reform Commission and relevant departments will study and formulate specific plans to refine and improve the areas of support. The general consideration is to coordinate the "hard investment" and "soft construction" and concentrate efforts on solving some major problems in the process of building a strong country and national rejuvenation, so as to lay a solid foundation for the realization of the second centenary goal as scheduled. On the one hand, we will focus on key areas such as scientific and technological innovation, urban-rural integrated development, regional coordinated development, food and energy resource security, and high-quality population development, organize and carry out project planning and reserves, preliminary work and construction implementation, and support the construction of a number of high-quality projects.

In addition to the 1 trillion yuan of new treasury bonds issued last year and the 1 trillion yuan of ultra-long-term special treasury bonds this year, 700 billion yuan of investment from the central budget and 3.9 trillion yuan of local government special bonds have also been arranged this year, with a total fund scale of more than 6 trillion yuan.

"Improving the efficiency of government investment and giving full play to the leading role of government investment in the whole society is the focus of this year's investment work. Liu Sushe said that this year will focus on three aspects of work: First, do a good job in the preliminary work. Supervise and urge relevant parties to strengthen project reserves, strengthen feasibility studies and other preliminary demonstrations, and improve the scientificity of investment decisions. At the same time, we will coordinate and increase the guarantee of land use, environmental impact assessment and other elements, and actively implement supporting financing. The second is to optimize the investment field. Adjust and optimize the investment structure of the central budget, appropriately expand the scope of investment of local government special bonds and the scope of capital funds, and at the same time strengthen the overall cohesion and dislocation arrangements of various types of government investment, so as to form an overall synergy of various types of funds. The third is to strengthen the management of the whole chain. We will further improve various systems and regulations, and build a management mechanism covering the whole cycle and whole chain of government investment project planning and reserves, preliminary work, investment decision-making, construction and operation, supervision and inspection, etc., so as to promote the improvement of investment efficiency with refined management.

Liao Min, Vice Minister of the Ministry of Finance, said that the financial sector has always adhered to the overall planning of stable growth and risk prevention, coordinated needs and possibilities, scientifically and rationally arranged the deficit level and government debt level, and ensured the medium and long-term sustainability of finance. On the whole, the level of government debt on the mainland is moderate, which not only meets the objective needs of promoting economic stability and improvement, but also is conducive to achieving medium- and long-term fiscal sustainability.