China will maintain prudent monetary policy and reasonable loan growth in 2018, central bank chief Zhou Xiaochuan said in comments published on Sunday.
In a new year’s message, Governor Zhou said that in 2017 the People’s Bank of China had strengthened macroeconomic controls, deepened financial reform, prevented systemic financial risks and promoted finance to serve the real economy.
In 2018, the central bank will continue its prudent policy and maintain reasonable monetary credit and social financing growth, Zhou added.
China’s central bank pledged on Friday to maintain its “prudent and neutral” monetary policy and to use policy tools to keep liquidity reasonably stable.
Analysts expect the central bank to keep policy slightly tight in 2018 – even as that has lifted market rates to multiyear highs – to support a broader deleveraging drive to contain risks in the world’s second-largest economy.
In a Central Economic Work Conference last month, China’s leadership made preventing financial risk an economic priority for the next three years.
The leadership under President Xi Jinping has decided that speed of growth is no longer an overriding concern as China now pursues “high quality” development instead, according to a statement from the state news agency Xinhua.
While it was also decided at the annual conference that China would stick to its “proactive fiscal policy and prudent monetary policy” for 2018, it has set three-year targets to clean up the messy financial sector and the country’s polluted air.
China will “fight the critical battle of addressing major risks with the priority on managing and preventing financial risk” over the next three years, a statement released after the conference said.
The clean-up will be conducted in the context that China’s economic growth will be kept within “a reasonable range”, it added.
More than 400 officials, including top economic cadres, provincial governors and executives from state-owned firms and financial institutions, attended the conference.
Courtesy South China Morning Post
