(Yicai) Nov. 12 -- China’s central bank will maintain a reasonable pace of overall financial growth and enhance the effectiveness of its monetary and credit policies, according to its third-quarter monetary policy report released yesterday.

The People’s Bank of China will also ensure a balance between domestic and foreign interest and exchange rates, accelerate the development of the country’s financial market system, promote high-level opening-up and carefully manage financial risks.

China’s economy expanded 5.2 percent in the first nine months from a year earlier, demonstrating continued resilience, the central bank said. As of Sept. 30, the balance of Chinese yuan-denominated loans had reached CNY270 trillion (USD38 trillion), while total social financing maintained a growth rate of over 8 percent to stand at CNY437 trillion (USD61.4 trillion). This indicates that the effects of "credit expansion" are becoming more apparent.

As the base grows larger, a moderate slowdown in overall financial growth is consistent with the principles of high-quality development, the PBOC said. In the future, the central bank will put more focus on shifting monetary credit development from outward expansion to inward growth to make better use of existing financial resources.

To better coordinate fiscal policy, the central bank will flexibly adjust open market operations to support the issuance of government bonds, it said. This year, the net financing amount of government bonds is expected to exceed CNY12 trillion (USD1.68 trillion), creating a synergy between monetary and fiscal policy to stabilize growth.

The PBOC will also further strengthen its macroprudential regulation and financial stability functions, extending additional oversight to the non-bank sector to prevent and resolve financial risks, it added.

Looking ahead, the central bank will continue to improve and effectively utilize monetary tools that support technological innovation, guide the use of financial data in the tech finance sector and speed up the creation of a financial system that better serves technological innovation.

It also plans to refine carbon-reduction financing tools, expand green financial products, develop carbon accounting rules for high-emission industries and promote financial institutions’ participation in carbon trading.

In addition, the central bank will improve the credit enhancement system for private small and medium-sized enterprises and roll out more policies to support their financing needs.

The PBOC's strategy aims to ensure steady overall growth while improving the structure of financial supply, experts said. By striking a careful balance between internal and external equilibrium, steady growth and risk control, and supported by coordinated macroeconomic policies, China is on track to meet its full-year growth target.

Editor: Kim Taylor