In a speech to the China Development Forum, the Central Bank of the Republic of China set out its assessment of global economic rebalancing and China’s shift toward higher-quality growth, while reaffirming a supportive monetary policy stance. It said it will continue a moderately loose policy to support stable growth and smooth market functioning, keep the exchange rate under a managed floating regime with market-based price formation, and advance high-level financial opening and cross-border use of the renminbi. The central bank said it will use tools including reserve requirement ratio adjustments, policy rates and open market operations to maintain ample liquidity, and rely on expectations guidance and transparent macroprudential tools to reduce herd behaviour in foreign exchange markets. It reported the renminbi had appreciated about 1.3% against the US dollar year to date, and by 3.7% against the euro, 3.2% against the Japanese yen and 2.4% against sterling, and reiterated there was no intention to seek trade advantage through depreciation. On opening, it highlighted plans to deepen cross-border connectivity in financial markets and payment systems and noted that, as of end-2025, overseas institutions and individuals held more than CNY 10 trillion of onshore renminbi financial assets; it also cited more than CNY 170 billion of Panda bonds issued in 2025 and said cross-border renminbi arrangements and financial infrastructure will be further improved. The speech also referenced measures to curb “involution-style” competition, including tighter discipline on local incentives and guidance for financial institutions to assess risks and restrain financing to sectors prone to such competition, alongside the government’s 2026 growth target of 4.5% to 5%.

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