On August 1, the People's Bank of China held a work conference for the second half of 2024. The meeting proposed to continue to implement a prudent monetary policy. We will increase financial support for the real economy, and shift more of our focus to benefiting people's livelihood and promoting consumption. It is worth noting that the State Administration of Foreign Exchange also recently held a foreign exchange meeting on foreign exchange management in the second half of 2024. The meeting stressed that the foreign exchange management departments should promote the reform of foreign exchange management of foreign direct investment in an orderly manner and make greater efforts to attract and utilize foreign capital.
Financial support entities are turning more to benefit people's livelihood and promote consumption
The meeting demanded that the People's Bank of China system should intensify macroeconomic regulation and control, strengthen countercyclical adjustment, do a solid job in all key tasks in the second half of the year, and enhance the momentum of sustained economic recovery.
First, we will continue to implement a sound and prudent monetary policy. We will increase financial support for the real economy, and shift more of our focus to benefiting people's livelihood and promoting consumption. We should make comprehensive use of a variety of monetary policy tools to maintain reasonable and abundant liquidity, and keep the scale of social financing and money supply in line with the expected targets of economic growth and price levels. Promote the steady decline in the cost of comprehensive social financing. Strengthen the guidance of expectations, maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, and resolutely guard against the risk of exchange rate overshoot.
The second is to strengthen the overall planning and policy implementation of the "five major articles" of finance. Accelerate the introduction of supporting policy documents for the "five major articles" of finance. We will continue to implement policies that have been introduced to support science and technology, green and private economy. We will continue to make good use of structural monetary policy tools to encourage and guide financial institutions to optimize their credit structure. Greater efforts will be made to promote financial support for large-scale equipment renewal and the trade-in of bulk durable consumer goods.
Third, we will continue to prevent and resolve financial risks in key areas. Do a solid job in resolving the debt risk of financial support financing platforms. Prevent and resolve real estate financial risks, implement the 300 billion yuan affordable housing re-lending policy, and promote the acceleration of the establishment of a housing system that combines rental and purchase. Promote the establishment of a risk disposal mechanism with equal rights and responsibilities and compatible incentives, and actively and steadily promote the disposal of stock risks.
Fourth, deepen financial reform and opening up and international financial cooperation. We will continue to optimize the operating mechanisms of direct access to the bond market and "Bond Connect" and "Swap Connect". Support the issuance of panda bonds by high-quality entities, and encourage financial institutions to carry out RMB cross-border financing business. Steadily promote cooperation in local currency swaps and local currency settlement between central banks. Upgrade and expand the policy of integrating domestic and foreign currency capital pools for multinational companies.
Fifth, continue to improve the level of financial services and management. Continue to do a good job in the management and service of comprehensive statistics of the financial industry, currency issuance, payment and clearing, treasury management, credit investigation, anti-money laundering and so on.
Intensify macroeconomic regulation and control, and strengthen counter-cyclical adjustment
The meeting demanded that macroeconomic regulation and control should be intensified, counter-cyclical adjustment should be strengthened, and various key tasks in the second half of the year should be done in a solid manner, so as to enhance the sustained upward trend of the economy.
First, we will continue to implement a sound and prudent monetary policy. We will increase financial support for the real economy, and shift more of our focus to benefiting people's livelihood and promoting consumption. We should make comprehensive use of a variety of monetary policy tools to maintain reasonable and abundant liquidity, and keep the scale of social financing and money supply in line with the expected targets of economic growth and price levels. Promote the steady decline in the cost of comprehensive social financing. Strengthen the guidance of expectations, maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, and resolutely guard against the risk of exchange rate overshoot.
The second is to strengthen the overall planning and policy implementation of the "five major articles" of finance. Accelerate the introduction of supporting policy documents for the "five major articles" of finance. We will continue to implement policies that have been introduced to support science and technology, green and private economy. We will continue to make good use of structural monetary policy tools to encourage and guide financial institutions to optimize their credit structure. Greater efforts will be made to promote financial support for large-scale equipment renewal and the trade-in of bulk durable consumer goods. Establish and improve statistical monitoring, assessment and evaluation systems in key areas. Carry out in-depth financial service capacity improvement projects such as science and technology, green, small and medium-sized enterprises, and rural revitalization.
Third, we will continue to prevent and resolve financial risks in key areas. Do a solid job in resolving the debt risk of financial support financing platforms. Prevent and resolve real estate financial risks, implement the 300 billion yuan affordable housing re-lending policy, and promote the acceleration of the establishment of a housing system that combines rental and purchase. Promote the establishment of a risk disposal mechanism with equal rights and responsibilities and compatible incentives, and actively and steadily promote the disposal of stock risks.
Fourth, deepen financial reform and opening up and international financial cooperation. We will continue to strengthen the construction of financial markets and institutional opening-up. Improve the legal system of the bond market. Promote the healthy development of the bill market. Improve the registration, custody, clearing and other businesses in the interbank market. Strengthen the construction of the transaction report database. We will continue to optimize the operating mechanisms of direct access to the bond market, "Bond Connect" and "Swap Connect". Support the development of Shanghai as an international financial center. Consolidate and enhance Hong Kong's status as an international financial centre. Steadily and steadily promote the internationalization of the RMB. We will continue to promote the pilot project of integrated domestic and foreign currency capital pooling, and improve the management of existing RMB cash pools and free trade accounts.
Fifth, continue to improve the level of financial services and management. Deepen the construction of a central bank under the rule of law. Continue to do a good job in the management and service of comprehensive statistics of the financial industry, currency issuance, payment and clearing, treasury management, credit investigation, anti-money laundering and so on. Strengthen internal management such as centralized procurement, logistics services, and services for retired cadres.
Greater efforts should be made to attract and utilize foreign investment
A few days ago, the State Administration of Foreign Exchange held an exchange meeting on foreign exchange management in the second half of 2024 to summarize the foreign exchange management work in the first half of 2024, analyze the current financial and foreign exchange situation, and study and deploy key tasks in the second half of the year. Zhu Hexin, Secretary of the Party Leadership Group and Director of the State Administration of Foreign Exchange, made a new work report.
The meeting demanded that the foreign exchange management system should pay more attention to system integration, promote the reform and innovation of foreign exchange management in accordance with the requirements of both "being lively" and "manageable", increase the supply of foreign exchange facilitation policies, and keep the bottom line of financial security under the conditions of opening up. It is necessary to pay more attention to highlighting the key points, focusing on supporting the development of new quality productivity, focusing on science and technology enterprises, small and medium-sized enterprises, and making overall plans to do a good job in the "five major articles" of finance, so as to improve the quality and efficiency of foreign exchange services for the real economy. It is necessary to pay more attention to the effectiveness of reform, establish and improve the evaluation mechanism for the effectiveness of the implementation of foreign exchange management policies, and evaluate the effectiveness of reform and policies based on whether it has brought real foreign exchange convenience to business entities.
The meeting pointed out that since 2024, the foreign exchange management department has coordinated the prevention of risks, strengthened supervision and promoted development in the field of foreign exchange, and achieved positive results in various tasks. Deepen the reform and opening up of the foreign exchange field. Effectively prevent the risk of external shocks. We have improved the operation and management of foreign exchange reserves, and the scale of foreign exchange reserves has remained stable at more than US$3.2 trillion.
The meeting stressed that the foreign exchange management departments should do a solid job in the second half of the year. Promote in-depth reform and high-level opening up in the field of foreign exchange. We will improve the level of current account facilitation, continue to improve foreign exchange services for foreign nationals coming to China, and help standardize and innovate the development of new forms of trade. We will steadily promote the high-quality opening up of the capital account, steadily and prudently expand the interconnection of financial markets, and upgrade and expand the policy of integrating domestic and foreign currency capital pools for multinational companies. Promote the reform of foreign exchange management of foreign direct investment in an orderly manner, and make greater efforts to attract and utilize foreign investment. Optimize the exchange rate hedging service for enterprises. Contribute to high-quality Belt and Road cooperation.
The meeting stressed that the foreign exchange management department should actively guard against the risk of cross-border capital flow. Improve the monitoring, early warning and response mechanism for cross-border capital flows, strengthen expectation management, and maintain the basic stability of the foreign exchange market. Strengthen and improve foreign exchange supervision. Strengthen the capacity of foreign exchange reserve operation and management, and ensure the safety, liquidity, preservation and appreciation of foreign exchange reserve assets.
