China's central bank targets lower financing costs to spur economic growth

The deputy governor of the People's Bank of China (PBOC) Xuan Changneng emphasized China's commitment to lowering overall financing costs to foster sustainable growth in its real economy, during a sub-forum of the Boao Forum for Asia (BFA) Annual Conference 2025 held on Thursday.

During the sub-forum titled "Seeking Monetary and Financial Stability in an Unstable World," Xuan highlighted that the current international economic and financial situation is increasingly uncertain, posing greater challenges for the formulation of monetary policy.

To address this, the PBOC is continuously refining its monetary policy framework in four aspects: policy stance, regulatory methods, policy instruments, and communication mechanisms.

"The PBOC is gradually shifting away from quantity-based targets and placing greater emphasis on price-based regulation. To this end, the central bank has recognized the 7-day reverse repo rate in open market operations as a policy rate. Recently, the Medium-term Lending Facility (MLF) operations have been adjusted from a single-price bidding to a multi-price bidding system, so the MLF rate is no longer considered as a policy rate," Xuan said at the forum.

Through changes in the seven-day reverse repurchase operation rate, the PBOC can influence interbank certificate of deposit rates, government bond yields, and subsequently, deposit and loan rates. This, in turn, promotes consumption and investment, thereby supporting economic growth.

Xuan also noted that under a moderately loose monetary policy stance, the PBOC will seize opportunities to lower reserve requirements and interest rates, continuing to drive down comprehensive financing costs in society and further boost economic recovery.

At the forum, Li Bin, deputy director of the State Administration of Foreign Exchange (SAFE), pointed out that with the optimization of China's economic structure and the increasing highlights in technological innovation this year, foreign investment in renminbi (RMB) assets is on the rise.

"Since February, foreign capital has been significantly increasing its holdings of renminbi assets. In February alone, foreign investors had a net increase of 12.7 billion U.S. dollars in domestic stocks and bonds, and this trend has continued into March," said Li.

The BFA Annual Conference 2025 opened on Thursday in Boao, south China's Hainan Province.

Founded in 2001, the BFA is a non-governmental and non-profit international organization committed to promoting regional economic integration and bringing Asian countries closer to their development goals.

Running from March 25 to 28, this year's conference is themed "Asia in the Changing World: Towards a Shared Future."

China's central bank targets lower financing costs to spur economic growth

China and Russia are set to further strengthen subnational cooperation through two key subnational mechanisms, the Yangtze-Volga Local cooperation and the Northeast-Far East cooperation, Foreign Ministry spokesperson Lin Jian said Friday.

Lin made the remarks at a press conference in Beijing, highlighting the role of the cooperation mechanisms in boosting bilateral economic and cultural ties.

"Under the strategic guidance of the two head of states, China-Russia relations have been moving forward on a high level and subnational cooperation has been advancing with wider scope and higher quality. The Yangtze-Volga cooperation council and the China-Russia Intergovernmental Commission on Cooperation and Development of Northeast China and the Far East and Baikal Region of Russia, as two major subnational cooperation mechanisms between China and Russia, since their establishment have been operating with high efficiency and played an important role in promoting economic and trade cooperation as well as people-to-people and cultural exchanges between relevant regions of China and Russia in a coordinated manner," Lin said.

"We believe that under the strategic guidance of the two head of states and with joint effort of both sides, subnational cooperation between China and Russia will continue to grow with vigor and vitality and inject more impetus to our effort of enriching the bilateral relationship, delivering more benefits to the two peoples and boosting our respective development and revitalization," said the spokesman.

China, Russia to enhance subnational ties through key cooperation platforms