On March 22, People's Bank of China Governor Pan Gongsheng emphasized the importance of strengthening financial support for China's economic structural transformation during the 2026 China Development Forum. He stated that the central bank will maintain a supportive monetary policy stance to foster a favorable monetary and financial environment for stable economic growth, high-quality development, and the smooth functioning of financial markets.
Governor Pan indicated that moderately accommodative monetary policies will continue. Currently, China's social financing conditions remain loose, with reasonable growth in overall financial aggregates. The PBOC will balance short-term and long-term goals, support for real economic growth, and the stability of the financial system, while managing both internal and external equilibriums. It will utilize a range of monetary policy tools—including reserve requirement ratios, policy interest rates, and open market operations—to ensure ample liquidity.
Wang Yunjin, Chief Financial Researcher at Guangkai Chief Industry Research Institute, noted that the central bank's commitment to supporting economic restructuring is clear. A key focus of this year's accommodative monetary policy will be optimizing and innovating structural monetary policy tools, with further reductions in costs and expansions in scope expected.
Wang pointed out that China currently employs a diverse array of structural monetary policy tools with broad coverage. Early this year, relending rates were cut by 0.25 percentage points, and some tools saw quota expansions and innovations. The PBOC will enhance the role of these tools in supporting industrial upgrading, improving livelihoods, stabilizing investment, and boosting key areas such as domestic demand, technological innovation, and small and medium-sized enterprises.
During the forum's opening session, Governor Pan also elaborated on the sources of China's industrial competitiveness, global economic imbalances, the policy stance on the renminbi exchange rate, and advancing high-level opening in the financial sector.
He identified four key sources of China's industrial competitiveness: a massive domestic market that enables rapid industrialization and scaling of innovations; a comprehensive industrial and supply chain system; a large, skilled, and diligent workforce; and strong technological innovation capabilities driven by sustained R&D investment, which has grown at an average annual rate of over 10% in the past five years.
Pan refuted international perceptions that China's industrial competitiveness stems from unfair subsidies, urging observers to visit China for a more accurate understanding. He emphasized that China promotes fair and healthy competition and has taken measures to curb "internal-rolling" competition among firms, including guiding financial institutions to assess risks prudently and reduce financing support for over-competitive sectors.
Regarding global economic imbalances, Pan offered a multi-faceted analysis using five "not only... but also" constructs. He highlighted the need to examine both goods and services trade, current and financial accounts, static and dynamic perspectives, economic and non-economic factors, and both the international trade and monetary systems. He noted that trade surpluses reflect global industrial division of labor, while persistent deficits in certain economies relate to flaws in the international monetary system, where reserve currency issuers can sustain fiscal deficits and export capital, leading to currency overvaluation and weakened manufacturing competitiveness.
Pan stressed the importance of stable, rational, and predictable cooperation, warning against trade fragmentation and advocating for a rules-based multilateral framework under the WTO.
On economic rebalancing, Pan underscored that structural transformation requires medium-to-long-term reform plans and steadfast implementation, rather than frequent policy reversals. China's 15th Five-Year Plan, now underway, reflects this approach. The plan focuses on shifting the growth model toward quality and sustainability, with a 2026 growth target of 4.5% to 5%, allowing room for structural adjustments.
Key priorities under the plan include strengthening domestic circulation, boosting consumption, improving social welfare, developing the service sector, advancing technological innovation, and accelerating green transformation. China aims to peak carbon emissions by 2030 and achieve carbon neutrality by 2060.
Pan also reaffirmed China's commitment to high-level financial opening. He emphasized that China has no intention of using currency depreciation for trade advantage and will maintain a market-based, flexible exchange rate regime while ensuring stability. Financial market connectivity and cross-border payment systems will be deepened to facilitate foreign investment. As of end-2025, overseas holdings of Chinese equities, bonds, and other RMB assets exceeded 10 trillion yuan.
Renminbi internationalization continues to progress, with Panda bond issuance surpassing 170 billion yuan in 2025. The PBOC will enhance RMB cross-border use infrastructure and promote offshore RMB market development.
Looking ahead, the central bank will actively participate in global financial governance reform, strengthen international policy coordination, and contribute to global economic and financial stability.
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