China’s central bank wants to do more to stimulate the economy

The Chinese central bank wants to support domestic demand and ward off financial risks in order to stimulate the economy sustainably. The central bank will make its policies “more precise and robust” and encourage financial institutions to lower lending interest rates, thus lowering financing costs for businesses and individuals, People’s Bank of China Governor Pan Gongsheng said in a report to Parliament released on Saturday.

Efforts will be made to stimulate capital markets and enhance investor confidence. Financial supervision must be strengthened and the risk of bond default by major real estate companies removed.

China’s faltering economy grew more strongly than expected in the summer and was therefore on the road to recovery. Gross domestic product in the world’s second-largest economy, which has been burdened by a real estate crisis and weak exporters, rose 4.9 percent in the July-September period compared to the previous year. This was higher than the expectations of economists polled by Reuters. In light of this, the central bank recently decided not to make further cuts in interest rates.