Governor Pan Gongsheng of the People's Bank of China (PBOC) said that China will implement more proactive and effective macroeconomic policies in 2025 to stimulate consumption, drive economic growth, and support the stable development of capital markets in both mainland and Hong Kong.
Pan made the remarks at the opening ceremony of the 18th Asian Financial Forum held in Hong Kong on Monday.
In terms of maintaining a favorable financing environment, Pan outlined plans to adopt a moderately loose monetary policy and utilize tools such as interest rates and the reserve requirement ratio to ensure ample liquidity in the market.
He emphasized a shift in the country's macroeconomic strategy, moving from a primary focus on investment to a more balanced approach that prioritizes both consumption and investment, with greater attention attached to boosting consumption.
Key measures to expand consumption will include increasing household incomes, providing more consumption subsidies, innovating in consumer supply systems and improving social security systems, he said.
He added that these efforts aim to better leverage consumption as a driver of economic growth and contribute to China's high-quality development. On the issue of exchange rate stability, Pan underscored the market's decisive role in determining the RMB exchange rate.
He stressed the need for the exchange rate to serve as an automatic stabilizer for macroeconomic and international balance of payments, while taking strong actions to redress pro-cyclical market behaviors, prevent disruption of market order, and guard against the risk of exchange rate overshooting, so that the RMB exchange rate remains basically stable at a reasonable and balanced level. Additionally, efforts will be made to greatly increase the share of the state's foreign exchange reserves allocated to Hong Kong, enhancing Hong Kong's position as an offshore RMB hub, he said.
In a further show of support, he pointed to the 800-billion-yuan currency swap agreement between the PBOC and the Hong Kong Monetary Authority (HKMA), which helps improve RMB liquidity in Hong Kong's offshore market.
Pan noted that the PBOC, HKMA, and securities regulators in both mainland and Hong Kong are working closely to enhance offshore RMB market development, improve financial market connectivity, and streamline cross-border payment and settlement systems.
The two-day 18th Asian Financial Forum opened in Hong Kong on Monday, themed on "Powering the Next Growth Engine".
For this year's event, around 3,600 financial and business representatives from over 50 countries and regions are expected to attend over 40 sessions on topics ranging from global economic outlook, new markets opportunities, artificial intelligence, fintech, sustainability to philanthropy.
Central bank governor vows stronger macroeconomic policies in 2025
