Remarks by Governor Yi Gang of the PBOC at
the Boao Forum for Asia
On April 22, 2022, the Boao Forum for Asia Annual Conference held a session on "Global
Inflaon, Interest Rate Hikes and Economic Stability". Governor Yi Gang aended the
session and delivered a keynote speech.
The following is the English translaon of the keynote speech as prepared for delivery:
Disnguished guests, ladies and gentlemen:
Today, I will mainly talk about China's economic outlook and monetary policy response.
The internaonal landscape is fraught with uncertaines. Recent geopolical tensions
have further pushed up inflaonary pressure worldwide.
China's financial market is not immune to the external shocks and domesc COVID-19
situaon is also pung more downward pressure on growth.
In the face of these challenges, China has adopted pre-empve measures to cope with
the situaon. Our accommodave monetary policy is stepping up support for the real
economy.
Since December 2021, one-year and five-year LPRs have gone down by 15 and 5 basis
points respecvely.
By end-March, M2 and total social financing expanded by 9.7 and 10.6 percent
respecvely, both saw significant increases compared with the end of 2021.
The PBOC has announced it would contribute over 1 trillion RMB to the central
government, which comes from the central bank's accumulated profit of the past few
years and is equivalent to an extra 1% of GDP in fiscal budget.
This extra budget is front-loaded, mainly used for VAT refund and budget transfer to
local governments. This is a good example of a combinaon of an accommodave
monetary policy and proacve fiscal policy.
Structure wise, we are providing support to key areas and weak links of the economy
through more targeted facilies. Two special central bank lending facilies have been
introduced to promote technological innovaon and inclusive elderly services.
We have also installed the Carbon Emission Reducon Facility (CERF) and the Central
Bank Lending Program for the Clean and Efficient Use of Coal, providing re-lending
support to enterprises through financial instuons. This has enabled the financial
instuons to lend out more than 230 billion yuan to qualified carbon reducon
programs and led to an annual reducon equivalent to over 40 million tons of carbon
dioxide emission.
Green finance has also enjoyed rapid growth. As of end-March, the amount of green
bonds reached 1.3 trillion yuan, up by 36% year on year. As of end-2021, the amount of
green loans grew 33% year on year to 16 trillion yuan, 22 percentage points faster than
the average.
Monetary policy is also focusing on small-and-medium enterprises and vulnerable
groups hit by Covid.
As of end-March, the balance of inclusive lending to mid-, small- and micro- businesses
grew 25% year on year to 21 trillion yuan. Recently, the PBOC announced 23 policy
measures for supporng the real economy, including providing assistance to people
hard hit by COVID-19.
The accommodave monetary policy helped to ensure a sound economic start in Q1
2022. The Chinese economy grew by 4.8 percent in Q1 2022, a slight improvement from
Q4 2021.
Consumer Price Index stayed within a moderate range. CPI right now is 1.1 percent in
Q1 and Producer Price Index is 8.7% recently.
Price stability is our policy priority. Grain producon and energy supply are crucial for
price stability this year. Agricultural producon, and the producon and import of key
energies, such as coal, oil and gas are the focus of financial services. As long as grain
producon and energy supply remain stable, inflaon will be kept within a reasonable
range.
To sum up, China's monetary policy is accommodave and is in a comfortable range. We
also stand ready to support small and medium enterprises with more instruments if
needed.
So with that outlook, certainly we have accommodave monetary policy supporng our
real economy throughout this year.
Thank you.
Date of last update APR. 22, 2022