On June 2, the central bank and the State Administration of Foreign Exchange held a press conference to interpret the financial policies deployed by the State Council executive meeting to solidly stabilize the economy. Pan Gongsheng, deputy governor of the central bank and director of the State Administration of Foreign Exchange, Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, Zou Lan, director of the monetary policy department of the central bank, and Li Bin, director of the macro-prudential bureau of the central bank, attended the meeting.
Central Bank and Foreign Exchange Administration press conferences focus on key points!
The meeting covered a number of key points: monetary policy, special re-lending mechanism, increased infrastructure support, housing credit policy, deferred principal and interest policy, the overall situation of the recent foreign exchange market, and specific measures to provide foreign exchange assistance to companies.
The following is a summary of the key points:
1. About monetary policy
The package of monetary and financial policies follows the overall approach of “stabilizing stock, expanding stock, reducing costs, and promoting openness”, strengthens policy guidance, gives play to the role of the market, and benefits distressed groups and key areas in a timely and precise manner, helping to stabilize the economic market.
When implementing monetary and credit policies, we must pay attention to several principles: first, while stabilizing economic growth, it is conducive to long-term sustainable economic development; second, while stabilizing economic growth, we must maintain stable employment, stable prices, and a balanced balance of international payments; third, It is to guide financial institutions to adhere to market-oriented and prudent operations while stabilizing economic growth, and to effectively prevent financial risks.
In accordance with the decisions and arrangements of the Party Central Committee and the State Council, the central bank will implement a package of policy measures to stabilize the economy and increase the implementation of prudent monetary policies. Specifically, it will focus on the following aspects: First, enhance the stability of total credit growth nature; the second is to highlight key areas of financial support; the third is to continue to promote the reduction of corporate financing costs.
2. Special refinancing mechanism
In order to ensure the accuracy and directness of refinancing tools, the People’s Bank of China has established a mechanism of “bank independent lending, ledger management, subsequent reimbursement by the central bank, total amount limit, clear purpose of relevant departments, and random inspections.”
The support scope of the special re-lending policy is determined by the cooperation of various departments, giving full play to their respective advantages and forming policy synergy. After financial institutions independently grant loans in accordance with the principles of marketization and rule of law, they apply to the People’s Bank of China for re-loans.
The People’s Bank of China provides re-loans to financial institutions in accordance with the “loan first and then borrow” model, rather than directly issuing loans to enterprises. Industry authorities and financial departments will conduct random inspections afterwards, and audit supervision and social supervision will follow up. If it is found that the loans of financial institutions exceed the scope of support, measures such as making up for the difference and withdrawing re-loans will be taken to prevent banks from illegally obtaining re-loan funds.
3. Increase infrastructure support
The central bank focuses on both the supply and demand ends of credit, guiding financial institutions to strengthen docking with key projects in accordance with the principles of marketization and rule of law, and promote the start of projects as soon as possible and accelerate construction. There are three specific measures:
The first is to strengthen the connection between banks, government and enterprises. Sort out the list of key projects to provide effective demand for financial institutions to issue medium and long-term loans. The second is to give full play to the role of policy development banks. We will increase the credit line of policy development banks by 800 billion yuan to improve their lending capabilities in the infrastructure field. The third is to mobilize commercial banks and social funds to increase financing support. Support financial institutions to work with local governments and social funds to jointly support infrastructure construction through the purchase of special bonds, PPP models, etc.
4. Housing credit policy
Our country has a vast territory, and the real estate market has obvious regional characteristics. There are great differences between different cities and different regions. Therefore, real estate market regulation needs to adhere to city-specific policies and local conditions.
Recently, under the framework of the long-term mechanism of the national real estate market, many cities have implemented city-specific policies and combined with the local real estate market situation, have adopted a series of measures to optimize and improve real estate policies.
The central bank will continue to adhere to the positioning that houses are for living in, not for speculation. In accordance with the requirements of exploring new development models, we will implement differentiated housing credit policies based on city policies to better meet the reasonable housing needs of home buyers and implement them steadily. Real estate financial prudent management system, accelerate the improvement of housing leasing financial policy system, and promote the stable and healthy development of the real estate market.
5. Deferred principal and interest payment policy
Compared with the 2020 policy, the extension policy recently proposed by the National Standing Committee has several main characteristics: first, the policy support is stronger; second, it focuses on leveraging the initiative of banks; third, the policy benefits are expanded; innovative support methods are provided.
The Standing Committee of the State Council proposed that the 90 billion yuan in truck loans issued by central automobile enterprises require banks and enterprises to jointly postpone the principal and interest payments. For qualified banks that support the extension of truck loans to central enterprises, the central bank will include the 100 billion yuan in transportation and logistics re-loan support.
Guide automobile group finance companies, automobile finance companies and financial leasing companies to innovatively launch freight logistics-themed financial bonds to provide truck owners and related logistics companies with loan repayment deferred principal and interest and support for continued and new investment, ensuring that they can continue to invest more It is better to implement the policy of deferred principal and interest payment.
6. Recent foreign exchange market trends� Quota, guide policy development banks to speed up project reserves, do a good job of decomposing tasks, strengthen assessment incentives, optimize loan processes, and improve loan disbursement capabilities in the infrastructure field.
Public information shows that in 2021, the China Development Bank issued 2.99 trillion yuan in local and foreign currency loans, and the balance of RMB loans increased by 650 billion yuan; the Agricultural Development Bank of China’s loan balance at the end of 2021 was 6.69 trillion yuan, an increase of 550 billion yuan from the beginning of the year; the Export-Import Bank of China’s RMB The loan balance exceeded 3.5 trillion yuan, an increase of 450 billion yuan from the beginning of the year. Taken together, the new credit scale of the three major policy banks in 2021 will be 1.65 trillion.
“The policy-oriented development credit line will be increased by 800 billion,” which is equivalent to 50% of the new credit scale of the three major banks last year, and the increase is very obvious. Among them, the China Development Bank is the largest, and China Development Bank should account for the largest share of the 800 billion new quota.
Taking into account last year’s Central Economic Work Conference’s request to move forward, the annual credit extension plan for 2022 determined by policy banks at the beginning of this year will definitely not be lower than that for 2021. Coupled with the new 800 billion quota this time, the three major policies for 2022 The annual new investment plan of sex banks is expected to be no less than 2.5 trillion.
The third is to leverage commercial banks and social funds to increase financing support. Leverage the advantages of large state-owned commercial banks and joint-stock banks to increase credit through syndicated loans and other means. Support financial institutions to work with local governments and social funds to jointly support infrastructure construction through the purchase of special bonds, PPP models, etc.
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