People’s Bank of China (PBOC) Governor Pan Gongsheng outlined plans to continue a moderately loose monetary policy, strengthen financial supervision and address financial risks in a report to the Standing Committee of the National People’s Congress on behalf of the State Council. Reviewing financial work since October 2025, the report detailed financing support for the economy and measures to resolve risks involving smaller financial institutions, local government financing vehicles and the property sector. At the end of September 2026, total social financing and broad money were up 7.1% and 7.2% year over year, respectively. Average rates on newly issued corporate loans and residential mortgages stood at 2.96% and 3.05%. Targeted support included expanded relending for technology, agriculture and small businesses, alongside a dedicated facility for private enterprises. Liquidity support tools were also established to address large redemptions at nonbank institutions and help clear corporate payment arrears. Further monetary policy work will focus on maintaining ample liquidity, improving interest rate transmission and reducing financing intermediary fees. Supervisory measures included stronger oversight of corporate governance and related party transactions, alongside tighter regulation of virtual currencies and real world asset tokenization. Risk resolution efforts reduced the number of remaining local government financing vehicles by 92% between March 2023 and September 2026. Their outstanding operating financial debt fell 79% between March 2023 and June 2026. Banks had also approved more than CNY 8.4 trillion in loans through the property financing “white list” mechanism. Priorities include resolving risks at institutions in key regions, supporting the transition of former financing vehicles to market operations and maintaining the property financing mechanism. Capital market measures will include supporting Central Huijin’s role akin to a market stabilization fund.

Original source