China's central bank signals further RRR, interest rate cuts to bolster growth

The People's Bank of China (PBOC), the country's central bank, will continue to implement a moderately loose monetary policy in 2026, and utilize tools such as reserve requirement ratio (RRR) cuts and interest rate reductions to ensure liquidity remains sufficient, according to its governor Pan Gongsheng.

Monetary policy will focus on promoting stable economic growth and reasonable price recovery, with the use of both incremental and existing policies to create a favorable monetary and financial environment for the high-quality development and stable operations of financial markets, said Pan.

"We will carefully calibrate the intensity, pace, and timing of policy implementation, and make flexible and efficient use of monetary policy instruments such as RRR cuts and interest rate reductions to maintain adequate liquidity. This will ensure that increases in aggregate financing and money supply are in step with projected economic growth and Consumer Price Index levels. There remains room for RRR and interest rate cuts this year. The PBOC will also strengthen the implementation and supervision of interest rate policies to keep overall financing costs low," said Pan.

For 2026, financial institutions will be guided to enhance support for key areas, including expanding domestic demand, advancing technological innovation, and assisting micro, small, and medium-sized enterprises, he said.

"Efforts will be made to improve consumer finance services, further facilitate payment service, and effectively implement the one-off credit repair policy to improve the consumer finance environment. We will also support eligible financial institutions in issuing financial bonds to boost funding supply in the consumption sector," said Pan.

In addition, policy backing will be further strengthened for technological innovation, said Pan.

The relending quota for sci-tech innovation and technological upgrades will be raised from 800 billion yuan (about 114.81 billion U.S. dollars) to 1.2 trillion yuan, with the scope extended to include small and medium-sized private enterprises (SMEs) with higher levels of research and development investment.

"The relending and rediscounting quota targeting agriculture and small businesses will be increased by 500 billion yuan, bringing the total to 4.35 trillion yuan. Meanwhile, a dedicated relending facility of 1 trillion yuan will be established specifically for private enterprises, prioritizing support for private SMEs. Financial institutions will also be supported in issuing financial bonds for micro and small enterprises, and the credit enhancement system for private SMEs will be improved," he said.

China's central bank signals further RRR, interest rate cuts to bolster growth

China's central bank signals further RRR, interest rate cuts to bolster growth

China's two major power grid operators -- the State Grid Corporation of China (State Grid) and China Southern Power Grid (CSG) -- reported a surge in investment in the first quarter of 2026, underscoring efforts to strengthen infrastructure construction and support high-quality socioeconomic development in China.

The State Grid said it completed fixed-asset investment worth 129 billion yuan (about 18.77 billion U.S. dollars) in the first three months of this year, up 37 percent the corresponding period of the previous year. The spending has driven more than 250 billion yuan (36 billion U.S. dollars) of investment across the wider industrial chain.

Key projects such as the Panxi ultra-high-voltage (UHV) alternating current (AC) line and the Anhui-Hubei back-to-back direct current (DC) project have seen ground broken for their construction, while several west-to-east power transmission projects have been upgraded.

Investment in connecting renewable energy generation to the grid was reported to have exceeded 10 billion yuan (1.45 billion U.S. dollars) from January to March, a year-on-year rise of more than 50 percent.

The CSG also reported robust growth in investment in the three-month period, with fixed-asset investment reaching 38.45 billion yuan (5.58 billion U.S. dollars), up about 50 percent from a year earlier.

Among its achievements, the company completed and commissioned 80 key projects, including the 220 kV cross-sea power grid interconnection project, which was officially put into operation on March 20. The project ended years of grid isolation on the Weizhou Island in south China by linking it to the main power system of the Guangxi Zhuang Autonomous Region.

The construction of 17 other major energy projects, including one linking the power grid of the Xizang Autonomous Region in southwest China with that of Guangdong Province in south China, is advancing rapidly. These projects are expected to bolster regional industries, the maritime economy, digital collaboration and the transition to green energy.

"By accelerating major project construction, investment during the 15th Five-Year Plan period (2026-2030) is expected to approach 1 trillion yuan (145 billion U.S. dollars), driving a further 2 trillion yuan (290 billion U.S. dollars) of investment across upstream and downstream industries," said Dong Yanle, deputy general manager of the Engineering Construction Department under the China Southern Power Grid.

China ramps up power grid investment in January-March to boost growth