China’s Central Bank and State Administration of Foreign Exchange Hold 2023 Second Half-Year Work Conference

The People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) held their work conference for the second half of 2023. The conference extensively studied and implemented Xi Jinping’s thought on socialism with Chinese characteristics for the new era, faithfully executed the Party Central Committee and the State Council’s decisions and arrangements regarding economic and financial work, summarized the work from the first half of the year, analyzed the current situation, and formulated the work plan for the next stage. Pan Gongsheng, Party Secretary and Governor of PBOC, and Party Secretary and Director of SAFE, attended the conference and delivered speeches. Members of PBOC’s Party Committee and members of SAFE’s Party Group also attended the conference. Deputy Head of the Central Guiding Group for Thematic Education, Lu Xi, was present at the meeting to provide guidance.

The conference recognized that since the beginning of 2023, PBOC and SAFE have conscientiously implemented the spirit of the 19th National Congress of the Communist Party of China and the Central Economic Work Conference, precisely and effectively implemented a prudent monetary policy, effectively controlled financial risks, continued deepening financial reforms, substantially improved financial services, comprehensively strengthened Party building, and achieved new accomplishments in various areas.

Key Highlights:

  1. Reasonable Growth in Monetary Credit and Financing Volume: The conference emphasized the importance of maintaining appropriate liquidity levels, guiding financial institutions to maintain a moderate and stable credit volume, reducing financing costs for the real economy while supporting its development, and ensuring a stable financial support.
  2. Effective Support for Key Areas of High-Quality Development: Measures have been taken to increase loans for agriculture and small businesses, continuing the implementation of support tools for inclusive loans to micro and small enterprises, carbon emission reduction, and clean and efficient utilization of coal. The conference also provided guidance for financial institutions to make good use of special loans for equipment upgrades.
  3. Stability in the Foreign Exchange Market: The conference reinforced the management of the foreign exchange market through “macro-prudential + micro-regulation” approach and optimized foreign exchange risk hedging services for enterprises. The conference aimed to maintain the renminbi exchange rate at a reasonable and balanced level and expanded and improved policies for trade and investment foreign exchange facilitation. Ensuring the security, liquidity, and value preservation of foreign exchange reserves.
  4. Orderly Disposal of Financial Risks in Key Areas: Efforts were made to further resolve risks in key financial institutions and accelerate the accumulation of financial stability guarantee funds. The conference aimed to improve the early-warning framework for bank risk monitoring, early intervention, and hard constraints. The application period for the “16 financial measures” was extended, supporting private real estate enterprises in issuing bonds and increasing financial support for the construction industry.
  5. Continued Deepening of Financial Reforms and Opening Up: The conference emphasized strengthening macro-prudential management and improving the monitoring and analysis framework for systemic financial risks. It conducted assessments of the systemically important banks domestically and implemented additional regulatory requirements. The conference also continued pilot projects like the cross-border wealth management connect in the Guangdong-Hong Kong-Macao Greater Bay Area and launched the onshore operation of the interest rate “swap link” between mainland China and Hong Kong.
  6. Continuous Deepening of International Financial Cooperation: The conference actively engaged in major financial diplomacy, constructive participation in multilateral mechanisms such as the G20 and the International Monetary Fund. It pushed for the establishment of a liquidity arrangement for the International Monetary Fund’s international liquidity reserve. Continued leadership in sustainable finance work within the G20.
  7. Improvement in Financial Service and Management Effectiveness: The conference accelerated the construction of the financial legal system, implemented large data statistics on important basic data and asset management products, and rectified prominent issues in the financial business of platform enterprises. It enhanced routine supervision, in-depth information infrastructure security protection work, and prudent research and development of the digital renminbi. The conference continued the construction of the national treasury project, strengthened compliance supervision for credit information, and safeguarded financial consumer rights. It also intensified anti-money laundering supervision for high-risk industries and institutions and enhanced the role of financial research and consulting in providing advice.

The conference stressed the comprehensive strengthening of Party leadership and Party building. It firmly adhered to the Party’s central leadership in financial work, earnestly implemented the decisions and arrangements of the Party Central Committee, and further improved the mechanism for supervising and implementing decisions, promptly reporting important work to the Party Central Committee. The conference completed the first batch of thematic education with high quality and carefully organized the second batch of thematic education. The institutional reform was steadily implemented. It fully implemented the Party committee’s responsibilities for ideological and political work. High-quality political inspections were carried out, and the use of inspection results was strengthened. It further strengthened the selection, training, and appointment of cadres. The conference remained resolute in combating corruption, persistently upholding strictness, and consistently intensified the fight against corruption. It implemented long-term and effective central inspection and rectification. Regarding the issues raised by the economic responsibility audit, the conference comprehensively and systematically studied and improved various work.

The conference called for the PBOC and SAFE to take Xi Jinping’s thought on socialism with Chinese characteristics for the new era as a guide, profoundly comprehend the decisive significance of “two assurances,” and resolutely ensure “two upholds.” They were required to fully implement the decisions and arrangements of the Party Central Committee and the State Council, work diligently, solidly implement all tasks, and continue to make creative efforts to promote the sustained recovery and improvement of the economy.