China’s central bank to step up policy adjustments, drive price rises
Paramilitary police officers stand guard in front of the headquarters of the People’s Bank of China, the central bank (PBOC), in Beijing, China Sept 30, 2022. REUTERS/Tingshu Wang/File photo
BEIJING –China’s central bank on Thursday said it would step up macroeconomic policy adjustments to support the economy and promote a rebound in prices, amid signs of rising deflationary pressures.
The People’s Bank of China (PBOC) will keep liquidity reasonably ample and guide the reasonable growth of credit, it said in a statement after a quarterly meeting of its monetary policy committee.
“The current external environment is becoming more complex and severe,” the central bank said. “The international economy, trade and investment are slowing down, inflation is falling from high levels, and interest rates in developed countries remain high.”
China’s economy is recovering but it still faces challenges such as insufficient effective demand and weak social expectations, it said.
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The central bank will “step up macroeconomic policy adjustments, and continuously consolidate the foundation of stability and improvement,” it said, adding it will “promote a recovery of prices from low levels and maintain prices at a reasonable level.”
Economic course for 2024
Earlier this month, top Chinese leaders at a key meeting to chart the economic course for 2024 pledged to implement monetary policy that will be “flexible, moderate, precise, and effective”.
Top leaders also said next year’s growth of total social financing – a measure of broad credit – and money supply would match expected goals on economic growth and inflation.
China’s consumer prices fell at the fastest rate in three years in November while factory-gate deflation deepened, indicating rising deflationary pressures as weak domestic demand casts doubt over the economic recovery.
The government has in recent months announced a series of measures to shore up China’s feeble post-pandemic economic recovery, which is being held back by a property slump, local government debt risks and slow global growth.
Growth target
China’s economic growth is seen on track to hit the official target of around 5 percent this year and Beijing is expected to maintain the target next year.
READ: Can China get its economic miracle back on track in 2024?
China will promote the stable and healthy development of the real estate market, meeting the reasonable financing needs of real estate companies of various ownership forms, the central bank said.
It will also boost financial support to enterprises and key groups to stabilize and expand jobs, and drive and stimulate more private investment, the PBOC added.
China will ensure the stability of the yuan currency and resolutely guard against the risk of exchange rate overshooting, it said.
