Chinese yuan Photo:VCG
China's central bank announced on Monday that it will implement a moderately loose monetary policy to foster a favorable financial environment for accelerating domestic consumption.
The announcement came during a press conference held on Monday, a day after China unveiled a special action plan aimed at boosting consumption.
The plan, issued by the General Office of the Communist Party of China Central Committee and the General Office of the State Council, seeks to significantly boost consumption, stimulate domestic demand, and enhance spending power by raising incomes and reducing financial burdens, according to the Xinhua News Agency.
The initiative also focuses on driving effective demand through high-quality supply, improve the consumption environment to strengthen consumer willingness to spend, and address prominent constraints on consumption.
The 30-point plan encourages financial institutions to expand personal consumer loan issuance while ensuring risk control, and to set reasonable limits, terms, and interest rates for such loans.
The central bank will implement a moderately loose monetary policy to foster a supportive financial environment for consumption growth, said Che Shiyi, an official from the People's Bank of China. "We will comprehensively use a variety of monetary policy tools such as reserve requirements, re-loans and re-discounts, and open market operations to maintain ample liquidity in the market," Che said.
Additionally, "we will enhance financial support for businesses in key consumer sectors such as culture, tourism, aged care, and sports, and promote the development and growth of consumer-related industries and enterprises," he added. Furthermore, we will encourage financial institutions to develop tailored financial products for emerging consumption trends such as consumer goods trade-in program, smart products, and ice and snow sports, he added.
"We will also actively support financial institutions to issue financial bonds to boost consumption. Support financial institutions to use consumer loans and auto loans as underlying assets, carry out asset securitization business, and increase auto loans and consumer loans," he said.
Consumer spending plays an increasingly important role in China's economy. Data from the National Bureau of Statistics (NBS) showed that in 2024, final consumption contributed 44.5 percent to China's economic growth, surpassing investment and exports, and contributing 2.2 percentage points to GDP growth.
China's retail sales of consumer goods, a key indicator of the country's consumption strength, climbed 4 percent year-on-year in the first two months of 2025, data from NBS showed on Monday.
China presents a market with vast potential, ample opportunities, and significant room for growth, said NBS spokesperson Fu Linghui on Monday.
Global Times
