Experts Say China's Monetary Policy Spurs Economic Growth in 2024
China's central bank has implemented a comprehensive strategy to bolster economic growth in 2024, with experts indicating that it has successfully aided the real economy.
TroibNews 
China's central bank is employing a comprehensive strategy to bolster economic growth in 2024, and experts agree that these efforts are having a meaningful impact on the real economy.
The People's Bank of China (PBOC) has reduced the reserve requirement ratio twice, which has injected approximately 2 trillion yuan into the economy.
In July and September, the PBOC also lowered the interest rate for the 7-day open market reverse repurchase operation by 10 and 20 basis points, respectively, resulting in a downward adjustment of the medium-term lending facility rate, the loan prime rate, and other associated rates.
"This year's interest rate and reserve requirement ratio cuts have been significant, frequent, and beyond expectations," said Dong Ximiao, chief researcher at Merchants Union Consumer Finance, during an interview with China Media Group.
"These measures have effectively lowered interest rates, reduced the borrowing costs for businesses and households, boosted market confidence, and stimulated effective demand," he added.
In addition, the PBOC has established a special relending facility valued at 500 billion yuan for scientific and technological innovation and transformation, along with a 300 billion yuan facility aimed at affordable housing, while also increasing relending quotas for agriculture and small businesses by 100 billion yuan to support crucial areas of high-quality development.
"China currently utilizes 20 structural monetary policy tools, specifically targeting the needs of key sectors, vulnerable areas, and businesses within the real economy. These tools are crucial in facilitating economic restructuring, upgrading, and the emergence of new growth drivers, such as green development and technological innovation," commented Dong.
"The current level of financing is stable, with the stock of social financing exceeding 40 trillion yuan, effectively supporting the real economy," Lou Feipeng, a researcher at China Postal Savings Bank, stated in an interview with People's Daily.
Looking forward, the Central Economic Work Conference has shifted the monetary policy tone from "prudent" to "moderately loose" for 2025, emphasizing a strong commitment to fostering economic recovery.
"Moderately loose indicates a continuation of comprehensive policy measures," remarked Zou Lan, director of the monetary policy department of the PBOC, in an interview with CMG. "This policy will not only maintain strong support for economic growth but also enhance investor confidence, stimulate consumption, and foster a virtuous cycle of economic activity," he added.
Frederick R Cook for TROIB News
The People's Bank of China (PBOC) has reduced the reserve requirement ratio twice, which has injected approximately 2 trillion yuan into the economy.
In July and September, the PBOC also lowered the interest rate for the 7-day open market reverse repurchase operation by 10 and 20 basis points, respectively, resulting in a downward adjustment of the medium-term lending facility rate, the loan prime rate, and other associated rates.
"This year's interest rate and reserve requirement ratio cuts have been significant, frequent, and beyond expectations," said Dong Ximiao, chief researcher at Merchants Union Consumer Finance, during an interview with China Media Group.
"These measures have effectively lowered interest rates, reduced the borrowing costs for businesses and households, boosted market confidence, and stimulated effective demand," he added.
In addition, the PBOC has established a special relending facility valued at 500 billion yuan for scientific and technological innovation and transformation, along with a 300 billion yuan facility aimed at affordable housing, while also increasing relending quotas for agriculture and small businesses by 100 billion yuan to support crucial areas of high-quality development.
"China currently utilizes 20 structural monetary policy tools, specifically targeting the needs of key sectors, vulnerable areas, and businesses within the real economy. These tools are crucial in facilitating economic restructuring, upgrading, and the emergence of new growth drivers, such as green development and technological innovation," commented Dong.
"The current level of financing is stable, with the stock of social financing exceeding 40 trillion yuan, effectively supporting the real economy," Lou Feipeng, a researcher at China Postal Savings Bank, stated in an interview with People's Daily.
Looking forward, the Central Economic Work Conference has shifted the monetary policy tone from "prudent" to "moderately loose" for 2025, emphasizing a strong commitment to fostering economic recovery.
"Moderately loose indicates a continuation of comprehensive policy measures," remarked Zou Lan, director of the monetary policy department of the PBOC, in an interview with CMG. "This policy will not only maintain strong support for economic growth but also enhance investor confidence, stimulate consumption, and foster a virtuous cycle of economic activity," he added.
Frederick R Cook for TROIB News
