Yi Gang: Monetary policy should focus on the impact of structural changes on price stability

The 13th Lujiazui Forum, co-hosted by the Shanghai Municipal People's Government, the People's Bank of China, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission, opened in Shanghai at 10:00 a.m. on June 10, 2021. Yi Gang, Governor of the People's Bank of China and co-chair of the Forum, made welcome remarks and delivered a keynote address.

According to Yi Gang,China’seconomy is operating within a reasonable range close to its potential level of output, and prices are overall manageable. In line with the new development stage, China shall maintain a normaland stable monetary policy, with a focus on keeping cross-cyclical balance of supply and demand, and implementing the monetary policy with appropriate intensity and pace. China shall continue to improve itsmanaged floating exchange rate regime based on marketdemand and supply with reference to a basket of currencies, promote internal and external balance, and keep the RMB exchange rate basically stable arounda reasonable and equilibriumlevel.

China will earnestly develop green finance. Emphasis will be placed on the following four areas of work: first, improving thegreen finance standardssystem; second, establishing a climate and environmental information disclosure system; third, incentivizing financial institutions to ramp up financial support to green industries; and fourth, guiding financial institutions to guard against risks from climate change.

China is committed to developing inclusive finance. More financial support will be given to micro and small businesses and self-employed people in order to maintain a sound level of employment and people's basic living standards, and to increase people’s income for more consumption. Following the market-oriented and law-based principles, the government will see to it that various incentives are made more compatible and commercial banks build stronger capacity to manage credit risks.

As global demands for RMB assets increase steadily, there will be more calls to improve risk management, legal environment and talent development for handling RMB assets. Shanghai will become a hub for RMB asset allocation, risk management and fintech development, a model city for best-in-class business environment and a preferred destination for financial professionals, with enhanced competitiveness as an international financial . For the next step, the People’s Bank of China will continue to support Shanghai’s international financial  initiative. It will also support Shanghai instrengtheningits role in global financial resource allocation, buildinghubs for green finance development that promotes the DualCirculation initiative, drivingthe integrated high-quality development of the Yangtze River Delta, and becomingan important hub and bridge linking the international and domestic markets under the new development paradigm.