China will maintain a dynamic balance between stabilizing growth and preventing risks while orderly addressing vulnerabilities in key sectors, central bank governor Pan Gongsheng said on Friday.
Speaking at a press conference on economic affairs during the fourth session of the 14th National People's Congress, Pan noted that the country's financial system remained generally sound over the past year, with major indicators significantly above regulatory standards.
As of the end of 2025, commercial banks' capital adequacy ratio stood at 15.5 percent and non-performing loan ratio at 1.5 percent, while insurers' comprehensive solvency ratio reached 181 percent, all reflecting strong risk resilience, he said.
"In the foreign exchange market, the Chinese yuan appreciated by nearly 4.5 percent against the U.S. dollar in 2025, broadly in line with the mid-range of major global currencies. In the bond market, yields fluctuated within a reasonable range, with the 10-year government bond yield stabilizing around 1.8 percent, keeping corporate financing costs low. In the capital market, China's stock market outperformed many of its global peers in 2025. Hong Kong's H-shares also performed well, with the Hang Seng Index rising by over 27 percent last year," Pan said.
Significant progress has also been made in resolving key risks. Compared with early 2023, the number of local government financing platforms and their debt scale had both declined by over 70 percent by the end of last year. The number of high-risk small and medium-sized financial institutions has dropped by half from its peak.
Looking ahead, Pan outlined five priorities for the central bank in maintaining financial stability through 2026.
The first priority is to maintain a dynamic balance between economic growth and risk prevention.
Building on this foundation, the central bank will work to orderly address vulnerabilities in key sectors, with a continued focus on resolving local government financing platform debt and mitigating risks associated with small and medium-sized banks.
A third objective is to safeguard the stable operation of financial markets, Pan noted.
"In the capital market, we will work with the securities regulator to effectively implement structural monetary policy tools in support of the market. We will support Central Huijin Investment in playing a role akin to a 'stabilization fund,' so as to enhance the capital market's inherent stability," Pan said.
The PBOC is also exploring mechanisms to provide liquidity support to non-bank institutions under certain conditions.
Additionally, it will guard against external shocks by closely monitoring global risks and using macroprudential tools to contain contagion amid growing geopolitical and economic uncertainty.
Efforts will also be made to strengthen the financial stability guarantee system through enhanced monitoring and legislative revisions.
"We will advance legislative efforts, including the formulation of the Financial Stability Law and amendments to the People's Bank of China Law. Efforts will also be made to strengthen the monitoring, assessment, and early warning of financial risks, ensuring timely detection, prompt warning, swift exposure, and decisive resolution," Pan said.
China's central bank governor outlines five priorities for financial stability in 2026
