Source: CCTV.com
12-04-2008 09:08
Special Report: 30 Years of ChangesSpecial Report: Global Financial Crisis
Premier Wen Jiabao has hosted a State Council meeting in Beijing giving approval to a whole string of monetary tools to maintain steady growth in the economy.
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| Premier Wen Jiabao has hosted a State Council meeting in Beijing giving approval to a whole string of monetary tools to maintain steady growth in the economy. |
China will make use of required reserves as well as interest rates and the exchange rate to ensure ample liquidity in the banking system. The State Council also approved measures aimed at establishing the domestic stock market, boosting bond issuance and increasing the supply of credit. A statement released listed 9 ways in which financial policy would be harnessed to support the economy, which is slowing sharply in response to the global downturn and a slump in the domestic property market.
To begin with, China will implement a moderately easy monetary policy to promote reasonable growth in money supply and credit. It will also use various measures, including required reserves, interest rates and the exchange rate, to ensure an adequate supply of liquidity in the banking system. China will also add 100 billion yuan to the loan quota for policy banks by the end of the year.
Meanwhile, local governments will be urged to inject money into credit guarantee firms and provide subsidies for them.
More measures will be taken to stabilize stock markets and increase bond issuance. Infrastructure bonds in particular will be encouraged.
Other moves include promoting insurance related to agriculture, the buying of houses and cars, healthcare and pensions. China will encourage insurance companies to invest in transport, communications, energy and other infrastructure projects.
In addition, China will provide new financing channels, including loans for mergers and acquisitions, real estate investment trusts, private equity funds and private lending.
Authorities will improve their management of foreign exchange to facilitate trade, while also upgrading its payments system. China will increase fiscal support to financial institutions to help tackle problems arising from non-performing loans.
And finally, China will enhance the control of risk to ensure financial security.
