(Yicai Global) Aug. 5 -- The People’s Bank of China’s Shanghai branch held a second-half working conference in which it unveiled a plan to support the accelerated economic recovery of the eastern Chinese city.
The PBOC shall assist Shanghai in speeding up the economic recovery, building a good fiscal and financial environment to guide financial institutions to increase the issuance of loans for the real economy, keeping a steady credit growth, and maintaining the actual loan interest rates stable with a small cut, it said yesterday, adding that the credit support for key areas such as infrastructure, green development, science and technological innovations, transportation, and logistics shall be enhanced.
The PBOC's Shanghai office introduced various measures during the Covid-19 outbreak in the city, achieving solid results in supporting the fight against the epidemic, stabilizing employment, and overcoming difficulties. Local financial institutions with legal entity status were guided to set the pace of credit issuance to promote the stability of companies with declining financing costs. They were also instructed to appropriately use various kinds of targeted re-lending policies.
With the support of policies, Shanghai’s economic rebound will accelerate, industry insiders believe.
Financial risk monitoring and management shall also be strengthened in the second half, the PBOC’s Shanghai office noted, adding that it will continue the discreet implementation of prudent real estate financial management and to play a cooperative role in preventing and tackling risks from cryptocurrency trading speculations.
Risk monitoring of bond and currency markets shall also be enhanced, with tighter regulation on payment institutions, enhanced supervision of cross-border fund flow, and intensified examination of foreign exchange situation, it said.
The construction of Shanghai into an international financial hub shall be furthered, with acceleration toward green financial innovations, the PBOC’s Shanghai brand pointed out. The cross-border use of the Chinese yuan shall be advanced, and banks shall be supported to carry out yuan offshore loan businesses and offer cross-border yuan settlement services.
The facilitation of cross-border trade investment and construction shall be continuously advanced, with the construction of a cross-border financial service platform. The innovation and trials of the digital yuan should also be promoted.
With the anti-Covid-19 measures implemented during the outbreak, Shanghai saw the loan size grow steadily in the first half of the year, with a total of CNY462.1 billion (USD68.5 billion) worth of new yuan-denominated loans, CNY145.7 billion of which were new short-term loans and CNY190 billion new medium- and long-term loans.
Yuan-denominated loans in Shanghai rose by CNY186.8 billion in June, CNY87.8 billion (USD13 billion) more than last June’s increase. The higher annual growth was mainly due to the outbreak returning under control and the administrative departments implementing targeted measures to keep logistics and transportation smooth, promoting the recovery of production and life, and driving the recovery of financing demand for economic activities, Zhou Maohua, a macroeconomy analyst at China Everbright Bank, earlier told Yicai Global.
Editors: Xu Wei, Futura Costaglione