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Friday, February 07, 2020, 23:01
PBOC: China's economy has strong resilience
By China Daily & Xinhua
Friday, February 07, 2020, 23:01 By China Daily & Xinhua

Pan Gongsheng, vice-governor of the People's Bank of China, speaks during a press conference in Beijing, March 12, 2016. (WANG ZHAO/AFP)

BEIJING - China's economy will maintain its strong resilience, and the government has sufficient policy tools to keep growth stable despite the fallout of the novel coronavirus outbreak, said a central bank vice governor.

Global institutions have agreed that the epidemic is temporary and China is able to keep its economic growth stable, said Pan Gongsheng, vice-governor of the PBOC

The financial measures used to contain the epidemic have received full support from major global financial organizations, including the International Monetary Fund and the World Bank. The global institutions have agreed that the epidemic is temporary and China is able to keep its economic growth stable, said Pan Gongsheng, vice-governor of the People's Bank of China, at a news conference on Friday.

READ MORE: IMF: China has resources to effectively deal with outbreak

He assured that the country has plenty of policy tools to cushion the short-term impact of the virus outbreak on the economy.

The epidemic might disturb economic activities in the first quarter of this year, but the impact is temporary, Pan said.

Given previous experience, the economy is likely to steady shortly after the epidemic is contained, as the unleashing of pent-up demands will make up for previous weak economic performance, Pan said.

"China's sound economic fundamentals for long-term and high-quality growth remain unchanged despite the epidemic," he said.

Countercyclical adjustment

Pan also said China will boost countercyclical adjustment efforts to keep market liquidity at a reasonably ample level in a bid to keep economic growth stable.

The PBOC will continue to make use of structural monetary policy tools like targeted reserve requirement ratio cuts to beef up support for major fields and weak areas in the economy, Pan said

The transmission mechanism for monetary policies will be further improved to reduce firms' funding costs, Pan said.

The loan prime rates, market-based references for lenders to set their loan interest rates, are widely expected to drop in the upcoming monthly release on Feb 20.

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The PBOC will continue to make use of structural monetary policy tools like targeted reserve requirement ratio cuts to beef up support for major fields and weak areas in the economy, Pan said.

The central bank has provided relending funds of 300 billion yuan (about US$42.98 billion) to national banks and local banks in the worst-hit regions, which will then grant credit support at favorable interest rates to key manufacturers of medical supplies and daily necessities.

The government will roll out more targeted and coordinated steps to help ease the financing difficulty for small and micro firms, Pan said.

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