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Highlights of central bank governor's news conference

Updated: Mar 9, 2018 Print


Central bank governor Zhou Xiaochuan attends a news conference on the sidelines of the annual session of the National People's Congress in Beijing, March 9, 2018. [Photo/VCG]

Yuan internationalization aids opening-up

Renminbi internationalization promotes China's opening-up, said Zhou Xiaochuan, governor of the People's Bank of China.

In terms of market access, China could take more bold actions to further open up, Zhou added.

He also predicted the trend of the opening-up of financial market will be further encouraged.

Leverage levels stabilizing, gradually falling

China's leverage levels are stabilizing and gradually falling, said Zhou Xiaochuan, central bank governor.

He also said that the central bank will play a more important role in the country's new regulatory framework.

"The trend of stabilizing and gradually falling leverages is entrenched," he said when responding to question that China's leverage levels are actually rising. The money supply growth, for example, has fallen even below nominal GDP growth, he said. "There are various debt financing indicators and one should not pick one indicator to come to the conclusion (of rising leverages)," he said.

He also said the country will study the twin peaks model of financial regulation in some countries, but not necessarily adopt it. "It (whether China will adopt the model) will mainly be based on China's conditions."

He said that under the new financial regulatory framework, China is already dealing with the already surfacing financial risks in financial and quasi-financial institutions to maintain health of the financial system.

M2 not the only money supply indicator

The broad measure of money supply, or M2, should not be the only indicator for understanding China's liquidity conditions, said Zhou Xiaochuan.

By the end of 2017, China's M2 growth was 8.2 percent, below the nominal year-on-year GDP growth of 8.5 percent, triggering concerns over inadequate liquidity to bolster normal economic growth.

"China's M2 growth is slightly lower than nominal GDP growth, but we should monitor more indicators, such as prices and jobs, to see whether liquidity is tight," he said.

There is no one simple indicator to judge the conditions of money supply, Zhou said. "It is a quite complex issue and multiple factors should be taken into consideration."

China's consumer price index grew by 1.6 percent year-on-year in 2017, well below the inflation target of 3 percent, and its unemployment rates, in terms of both registered and surveyed unemployment rate, were low, statistics of the National Bureau of Statistics show.

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