China’s PBOC Governor, Finance Minister Vow Support for Economy

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(Bloomberg) — China will push banks to lend more to some sectors and also speed up the rollout of existing economic support policies, the country’s central bank governor and finance minister said.

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People’s Bank of China Governor Yi Gang on Thursday reaffirmed a pledge to “step up the implementation of a prudent monetary policy and provide stronger help to the economy,” in a video speech at a meeting of the central bank governors of the Group of 20 countries. Yi also said the PBOC will press banks to increase loans related to infrastructure, manufacturing and property.

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Details of Yi’s remarks — during which he also said China’s consumer prices are “basically stable” — were published by the PBOC on Friday.

Finance Minister Liu Kun also spoke at the same event via video, saying the Chinese government would keep accelerating the rollout of its existing pro-growth policies, according to a Friday statement from that ministry.

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Liu warned the global economy faces a “more complicated and grave” environment, and urged for greater coordination of policies addressing inflation and risks to food and energy security.

“We must prevent the severe negative spillover effects of policy adjustment in some countries,” he said, according to the Ministry of Finance statement.

Yi, meanwhile, emphasized some specific measures that are of focus for the PBOC, including the encouragement of banks to lend to companies to pay for the upgrade of manufacturing equipment. The central bank will also push for faster lending to ensure the delivery of stalled housing projects in order to promote the healthy and stable development of the property sector, he added, according to the PBOC statement.

Credit growth recovered more than expected in September after the government ramped up support for infrastructure investment and took steps to spur housing demand. Next week the PBOC is forecast to refrain from draining cash via medium term loans for the first time in three months, and also keep the interest rate for the loans unchanged to avoid putting more pressure on a sliding yuan.

(Updates with comments from China’s finance minister.)