Governor of the People's Bank of China Pan Gongsheng: Strengthen Financial Support for China's Economic Structural Transformation

Securities Times Reporter He Jueyuan, Qin Yanling

On March 22, People’s Bank of China Governor Pan Gongsheng attended the China Development High-Level Forum 2026 Annual Conference and delivered a keynote speech on “High-Quality Development in China and Global Economic Rebalancing.” Pan Gongsheng stated that China is actively promoting the transformation of its economic growth model, improving growth quality and sustainability. To strengthen financial support for China’s economic restructuring, the central bank will adhere to a supportive monetary policy stance, creating a favorable monetary and financial environment for stable economic growth, high-quality development, and smooth financial market operation.

“China’s international competitiveness in industry is primarily due to over 40 years of reform and opening up. In opening up to the world, we learn from our international partners, including the excellent global enterprises present here today. We learn through competition and grow through learning,” Pan Gongsheng mentioned when discussing the sources of China’s industrial international competitiveness.

He also pointed out that the super-large market, complete industrial and supply chains, abundant high-quality and skilled labor resources, especially technical talents, and continuous R&D investment driving technological innovation all play crucial roles in enhancing China’s industrial competitiveness.

For example, the large-scale market allows technological innovations to be easily industrialized, scaled, commercialized, and rapidly iterated, forming technological leadership and cost advantages.

“Regarding the sources of China’s industrial competitiveness, some international perceptions still attribute it to unreasonable industrial subsidies provided by the Chinese government. If there are such doubts, it would be helpful to visit China more often and see for yourself, which can lead to a more accurate and comprehensive understanding of China’s industries,” Pan Gongsheng emphasized. China advocates fair, healthy, and competitive markets. Regarding the “involution” competition among some enterprises, the central government has taken measures to regulate local government investment promotion behaviors, prohibiting unreasonable incentives such as tax and land use benefits, and building a unified national market. The central bank guides financial institutions to assess risks scientifically and to curb “involution” industry financing from a financial perspective.

To further support China’s economic restructuring through financial means, Pan Gongsheng stated that the central bank will maintain a supportive monetary policy stance, creating a good monetary and financial environment for stable growth, high-quality development, and smooth financial market operation.

The central bank will continue to implement moderately loose monetary policy. Currently, China’s social financing conditions are relaxed, and the total financial volume is growing reasonably. The central bank will balance short-term and long-term considerations, supporting real economic growth while maintaining the health of the financial system, managing internal and external balance, and employing various monetary policy tools such as reserve requirement ratios, policy interest rates, and open market operations to ensure ample liquidity.

According to the International Monetary Fund’s classification standards, China operates a managed floating exchange rate system. Pan Gongsheng emphasized that China has neither the need nor the intention to devalue its currency to gain a trade advantage. The central bank’s stance remains clear: market forces should play a decisive role in exchange rate formation, maintaining exchange rate flexibility, while strengthening expectation guidance to keep the RMB exchange rate basically stable at a reasonable and balanced level. The central bank’s expectation management and the use of transparent, internationally aligned macroprudential tools help correct market “herd behavior” and market failures, preventing destructive imbalances that have repeatedly occurred in international financial history.

Pan Gongsheng pointed out that the central bank will steadily promote high-level opening of the financial sector. Deepening financial market connectivity and cross-border payment systems will facilitate more investors to invest in China’s financial markets. China’s stock and bond markets are both the second largest in the world, with continuous improvements in market depth, resilience, and liquidity. “We welcome foreign investors to participate in and invest in China’s financial markets,” Pan Gongsheng said.

In recent years, RMB internationalization has made positive progress, providing more diversified currency options for domestic and foreign entities. Pan Gongsheng stated that the cost of RMB financing is currently relatively low. The central bank will continue to improve the cross-border use system of RMB and develop financial infrastructure. It will carry out diversified monetary and financial cooperation, promote the development of offshore RMB markets, and facilitate cross-border trade and investment activities.