From January to November 2023, the amount of cross-border RMB receipts and payments was 48 trillion yuan, a year-on-year increase of 24%. Among them, the proportion of RMB settlement in goods** is 25%, which is the highest level in recent years. According to data released by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) in November 2023, the renminbi rose to become the fourth payment currency in the world. At present, the proportion of RMB in global ** financing has risen to the second place, and more than 80 foreign central banks or monetary authorities have included RMB in foreign exchange reserves.
Create a favorable monetary and financial environment for high-quality development
-- Relevant responsible persons of the People's Bank of China talked about implementing the spirit of the economic work conference
* The Economic Work Conference emphasized that "a prudent monetary policy should be flexible, moderate, precise and effective", "give full play to the dual functions of monetary policy tools, revitalize the stock, improve efficiency, and guide financial institutions to increase support for scientific and technological innovation, green transformation, inclusive small and micro enterprises, and digital economy". This year, to consolidate and enhance the positive trend of economic recovery and solidly promote high-quality development, what aspects will the monetary policy exert? What are the important measures to prevent and resolve financial risks and promote high-level financial opening-up this year? Focusing on the implementation of the spirit of the economic work conference, Zou Lan, director of the Monetary Policy Department of the People's Bank of China, Sun Tianqi, director of the Financial Stability Bureau, and Li Bin, director of the Macro-Prudential Management Bureau, were interviewed by this reporter.
Intensify counter-cyclical and cross-cyclical regulation
Reporter: **The Economic Work Conference proposed that a prudent monetary policy should be flexible, moderate, precise and effective. How does the People's Bank of China implement this requirement?
Zou Lan: The People's Bank of China will deeply study and understand the spirit of the economic work conference, strengthen counter-cyclical and cross-cyclical adjustment, and create a good monetary and financial environment for high-quality economic development.
In terms of aggregate amount, liquidity should be kept reasonable and abundant, and the scale of social financing and the amount of money should match the expected targets of economic growth and the highest level. Scientifically distinguish and grasp the short-term, medium- and long-term factors that affect the liquidity of the interbank market, and comprehensively use basic currency delivery tools such as open market operations, medium-term lending facilities, re-lending and re-discounting, and reserves, so as to provide strong support for the scale of social financing and the reasonable growth of money and credit, and at the same time prevent the accumulation of funds, guide financial institutions to strengthen liquidity risk management, and maintain the smooth operation of the money market. In accordance with the requirements of vigorously developing direct financing, we should rationally grasp the relationship between the two largest financing markets, bonds and credit. Strengthen coordination and cooperation with fiscal policies, ensure the smooth issuance of ** bonds, and continue to promote the development of corporate credit bonds and financial bond markets. Support financial institutions to focus on key tasks, actively tap credit demand and project reserves, guide financial institutions to scientifically formulate annual credit arrangements, moderately smooth quarterly and monthly fluctuations, and take multiple measures to promote reasonable growth of loans.
In terms of structure, we should give full play to the dual functions of monetary policy tools, revitalize stocks, and improve efficiency. Accelerate the adaptation to major changes in the structure of credit demand, optimize the structure of capital supply, effectively increase and decrease, and promote industrial transformation and upgrading and the transformation of old and new kinetic energy. In terms of growth, it is necessary to further improve the guidance efficiency of monetary and credit policies, closely follow major strategies, key areas and weak links, and focus on the "five major articles" of science and technology finance, green finance, inclusive finance, pension finance and digital finance, so as to serve high-quality development. In terms of reduction, we will adhere to the principle of marketization and rule of law, and revitalize the financial resources that have been inefficiently occupied through various methods such as debt restructuring and market liquidation.
In terms of **, we will promote the steady decline of comprehensive social financing costs and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Recently, the exchange rate of the renminbi against the US dollar has rebounded significantly, and the fluctuation level throughout the year is basically the same as that of major international currencies, and the exchange rate of the renminbi against a basket of currencies has risen steadily and slightly, giving better play to the role of an automatic stabilizer in regulating the macroeconomy and the balance of payments. In the future, we will continue to insist that the market plays a decisive role in the formation of the exchange rate, guide enterprises and financial institutions to establish a risk-neutral concept, and at the same time adhere to the bottom-line thinking, implement comprehensive policies, stabilize expectations, prevent the formation of unilateral consistent expectations and self-reinforcement, and resolutely guard against the risk of exchange rate overshoot.
Since last year, through strengthening self-discipline and management, a market-oriented adjustment mechanism for deposit interest rates has been gradually formed. We will continue to deepen the market-oriented reform of interest rates, and promote a steady and moderate reduction in the comprehensive financing cost of the society while maintaining the bank's ability to support the sustainability of the real economy and risk prevention and mitigation. We will guide financial institutions to accelerate the development of the over-the-counter bond market, which will not only provide more investment options for households, but also further open up diversified channels for the conversion of savings into investment.
Achieve "early identification, early warning, early exposure, and early disposal" of risks
Reporter: What is the overall situation of risks in the financial sector at present? How to prevent and resolve financial risks in the next step?
Sun Tianqi: In recent years, the People's Bank of China, together with relevant departments and localities, has resolutely fought a tough battle to prevent and defuse major financial risks. A number of prominent risk points with great impact, urgency and overall importance have been effectively dealt with, financial risks have been converged and controllable as a whole, and important phased results have been achieved in the battle to prevent and resolve major financial risks.
At present, China's financial system is generally stable. As of the end of September 2023, the total assets of China's financial institutions were 453 trillion yuan, of which 410 trillion yuan were the total assets of banking institutions, accounting for more than ninety percent of the assets. 89% and 6515%。The results of the stress test of banking institutions carried out in 2023 show that the overall anti-risk ability of Chinese banks is strong. The level of deposit protection in China remains high, and deposit insurance can provide full protection for more than 99% of depositors. As China's economy continues to pick up, China's financial system will be healthier and more stable.
* The Economic Work Conference proposed to continue to effectively prevent and resolve risks in key areas. In the next step, the financial management department will conscientiously implement the spirit of the first economic work conference and the first financial work conference, deeply grasp the political and people's nature of financial work, comprehensively strengthen financial supervision, and bring all financial activities into supervision in accordance with the law, so as to eliminate regulatory gaps and blind spots. We will further give full play to the role of stress testing, improve the financial risk monitoring, assessment and prevention and control system, establish an early correction system with hard constraints for new high-risk financial institutions, clarify the rectification period and requirements, and achieve "early identification, early warning, early exposure and early disposal" of risks. We will improve the risk disposal responsibility mechanism that is consistent with rights and responsibilities and compatible with incentives and constraints, give full play to the professional and normalized risk handling functions of deposit insurance, strengthen the construction of the financial stability guarantee system, and firmly adhere to the bottom line of no systemic risks.
Improve the quality and level of RMB internationalization
Reporter: In recent years, what results has the People's Bank of China achieved in steadily and solidly promoting the internationalization of the renminbi and promoting high-level financial opening?What's next?
Li Bin: In recent years, the People's Bank of China has been guided by the construction of a new development pattern and the promotion of investment facilitation, adhered to market-driven, mutually beneficial and win-win results, coordinated development and security, continuously improved the institutional arrangements and infrastructure construction for the cross-border use of RMB, promoted the two-way opening of the financial market, created a better policy environment for domestic and foreign entities to hold and use RMB, and made new progress in the international use of RMB. From January to November 2023, the amount of cross-border RMB receipts and payments was 48 trillion yuan, a year-on-year increase of 24%. Among them, the proportion of RMB settlement in goods** is 25%, which is the highest level in recent years. According to data released by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) in November 2023, the renminbi rose to become the fourth payment currency in the world. At present, the proportion of RMB in global ** financing has risen to the second place, and more than 80 foreign central banks or monetary authorities have included RMB in foreign exchange reserves. The cross-border RMB payment system (CIPS) has continued to improve its service level, and for the first time during the National Day Mid-Autumn Festival holiday last year, it continued to provide cross-border RMB payment and clearing services for domestic and foreign customers.
In the next step, the People's Bank of China will conscientiously implement the spirit of the ** Economic Work Conference and the ** Financial Work Conference, pay more attention to improving the quality and level of RMB internationalization, steadily and solidly promote the international use of RMB, and better meet the market needs of business entities such as transaction settlement, investment and financing, and risk management. The first is to focus on investment facilitation, continue to do a good job in institutional design, policy support and market cultivation, strengthen the coordination of domestic and foreign currencies, improve the basic institutional arrangements and infrastructure construction for the cross-border use of RMB, and enhance the ability of cross-border RMB business to serve the real economy and promote high-quality development. The second is to adhere to mutual benefit and win-win results, promote the comprehensive institutional opening of the financial market in a prudent and orderly manner, further improve the degree of openness and access of China's foreign exchange and financial markets, improve the liquidity of RMB financial assets, enrich risk hedging tools, and build a more friendly and convenient investment and financing environment. Third, we will continue to steadily promote bilateral local currency swaps and local currency settlement cooperation between central banks. Strengthen the construction of the RMB cross-border payment system and improve the efficiency and security of RMB clearing. Fourth, we will promote the construction of the offshore RMB market, improve the RMB liquidity supply mechanism in the offshore market, enrich the offshore RMB risk management tools, and enrich the offshore RMB financial products. Fifth, strengthen the supervision of cross-border RMB business. We will further improve the assessment and early warning system for cross-border capital flows, improve the macro-prudential management framework for cross-border capital flows that integrates domestic and foreign currencies, build a solid "breakwater", and ensure that the internationalization of the RMB is steadily advanced on the premise of maintaining the bottom line of safety.
"People**" 2024-01-11 Edition 03) Reporter: Wu Qiuyu