Central bank vows to better serve the real economy: Governor Yi

China’s central bank will implement more targeted measures to fuel the development of small and micro enterprises in 2019, and will make comprehensive use of financial tools like credit, bonds and equity to meet private enterprises' financing needs, governor Yi Gang said.

Governor Yi made the remarks on Tuesday during an interview on what the top banking regulator will do after the annual Central Economic Work Conference.

The People's Bank of China said it will endeavor to create a suitable financial environment for the country’s supply-side structural reform and high-quality development by better carrying out prudent monetary policies.

More specifically, Yi emphasized that they aim to gain better control of overall liquidity and will prevent credit from shrinking too fast or injecting too much liquidity into the economy.

For example, the central bank recently announced that it will cut the requirement reserve ratio (RRR) by 0.5 percentage points on January 15 and January 25, respectively. The move aims to offset liquidity fluctuations before the Spring Festival as opposed to being a large-scale injection of money supply.

Yi added that they have made consistent efforts to improve the funding environment for micro and small-sized companies since last year. Data showed that outstanding loans to those enterprises stood at 7.8 trillion yuan (US$1.14 trillion) as of the end of November 2018, up by 17.1 percent year on year. 

For the next twelve months, Yi said they will adopt a variety of monetary tools such as RRR cuts and targeted medium-term lending facilities to lend further support to real economy and resort to diversified financial tools like credit, bonds and equity to better satisfy private enterprises' financing needs.