Central bank governor headlines 13th Lujiazui Forum

China will continue implementing a prudent monetary policy in line with the new stage of development, and deepen interest-rate-liberalization reform, said central bank governor Yi Gang.

At the 13th Lujiazui Forum that opened on Thursday – which aims to offer inspiring ideas and suggestions for promoting global economic recovery and financial stability as well as China's financial reform and opening-up – Yi shared his insights on monetary policy and the development of green and inclusive finance, revealing policy clues for the direction of China's financial sector.

The potential growth of the Chinese economy will moderate amid the shift toward high-quality development from high-speed growth, primarily due to the bigger comparison base, slower labor-productivity growth and changes in the population structure.

Despite the COVID-19 pandemic, Yi expects average gross domestic product growth in 2020-2021 will remain close to the potential growth rate.

Meanwhile, China's consumer-inflation rate is expected to stay under 2 percent this year, below the official target of about 3 percent.

"Considering our economy is operating within a reasonable range close to the potential output level and prices are manageable, monetary policy should adapt to the new stage of development and adhere to the principle of stability and implementation of normal policies," Yi said.

China's current interest rate is kept at an appropriate level, slightly higher than developed countries but still relatively low compared with rates in other developing markets, which is a boon for the robust development of markets.

In addition to liberalizing interest rates, Yi pledged to unleash the potential of Loan Prime Rate reform.

He said for monetary and credit policies, greater emphasis will be placed on two structural aspects – beefing up the development of green finance and increasing support for inclusive finance.

Yi Huiman, chairman of the China Securities Regulatory Commission, Shanghai Mayor Gong Zheng and Pan Gongsheng, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange, delivered speeches at the forum.

Li Qiang, Party secretary of Shanghai, Yi Gang, governor of the People's Bank of China, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, and Bruno Le Maire, French minister of economy, finance and recovery, also gave speeches via videosteaming.