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    Overcome Difficulties and Ensure Quality Services to Support Epidemic Control and Resumption of Work — Press Conference Transcript
Overcome Difficulties and Ensure Quality Services to Support Epidemic Control and Resumption of Work — Press Conference Transcript

The Joint Prevention and Control Mechanism of the State Council held a press conference at 10am on Saturday, February 15, 2020. Leaders of the People's Bank of China (PBC), China Banking and Insurance Regulatory Commission (CBIRC), China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange (SAFE) attended the conference and introduced how the financial system has overcome difficulties and ensured quality services to support epidemic control and resumption of work, and answered media questions. The full transcript of the conference is as follows.

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference of the Joint Prevention and Control Mechanism of the State Council. The State Council Information Office has just held a press conference in Wuhan on epidemic prevention and control and medical treatment efforts in Hubei. At this conference, we are pleased to have with us Mr. Fan Yifei, PBC Deputy Governor, Mr. Liang Tao, CBIRC Vice Chairman, Mr. Yan Qingmin, CSRC Vice Chairman, and Mr. Xuan Changneng, SAFE Deputy Administrator. They will introduce how the financial system has supported the efforts to battle the epidemic and reopen for businesses, and then they will take your questions.

Now, I will give the floor to Deputy Governor Fan Yifei.

Fan Yifei:

Friends from the press, good morning. Recently your fellow reporters have taken on their mission and gone to the front line to report the epidemic prevention and control efforts, despite the risk of infection. On behalf of the People's Bank of China, I would like to show our deepest appreciation to your professional dedication and long-term support for the financial work.

Since the outbreak, following Secretary-general Xi Jinping's instructions and the arrangements of the Leading Group of the CPC Central Committee for Epidemic Prevention and Control, we have adopted a people-first approach and put epidemic prevention and control and resumption of work high on our agenda as a key political task. We have gone all out to implement precise policy measures, collaborate closely with authorities and introduce a host of policy measures to fully support epidemic prevention and control and resumption of work. For macro policies, the PBC and the CBIRC have given detailed introduction at the previous press conference. Here I would like to focus on financial services including payment and settlement, currency supply, and operations of financial infrastructure, as well as early resumption of work in companies.

First, we have offered easy access to payment and settlement to ensure timely transfers of funds into the accounts

I'd start with fund remittance and transfer. The large-amount payment system of the PBC is usually suspended during the Chinese New Year. But to support epidemic prevention and control, easy access to large-amount fund transfers and remittances is offered, and transaction limits of the micropayment system are relaxed for this New Year holiday and weekends that follow to make sure that demands for large-amount fund transfers and remittances in and outside China are met. From January 24 to February 14, the large-amount payment and micropayment systems handled 393,500 transactions for the payment of more than RMB 10 million each, which were worth RMB 77.37 trillion in total. In particular, 872 transactions worth RMB 44.796 billion were related to epidemic control efforts. What's more, the Cross-border Interbank Payment System (CIPS) offers "special access" to cross-border payments. Since February 3, we have extended the operating time of the large-amount payment system to ensure the needs for inter-bank transactions and PBC targeted re-lending business are met. For account service, we provide easy access to corporate banking accounts in support of China's epidemic response. We have adopted a special approach to special fiscal funds and special emergency funds that require verification from the PBC for opening an account and handle them immediately after such requirements are raised. We also have optimized the account opening service, allowing commercial banks to identify customers' identities and open accounts for them if they temporarily cannot present complete supporting materials required for opening an account that is to be used to support epidemic prevention and control, and require them to submit the materials later on. In addition, we have been active in increasing efficiency, guiding companies and individuals to handle payment, settlement and account business online.

Second, we have enhanced currency supply and circulation management to ensure security of using cash

Firstly, we have adopted a special approach to currency supply in Hubei, the epicenter of the epidemic. We allocated RMB 4 billion of new banknotes to Wuhan before the lunar New Year to increase cash supply to hospitals and other institutions critical to the prevention and control of the spread of the virus. Secondly, we have required our branches and sub-branches to ensure cash supply by issuing sealed new banknotes or reserve funds for issuance that were recovered before the outbreak. Thirdly, we have worked to ensure sterilization of cash in circulation, requiring key institutions to temporarily store the recovered cash in their treasuries. Cash allocation between provinces and in the same hard-hit province has been suspended to reduce infections. Fourthly, we have required commercial banks to adopt a two-faceted approach to receipts and payments, such as sterilizing the received cash before issuing them to customers.

Third, we have worked to ensure continued and safe operations of fintech and key financial infrastructure

Since the outbreak, the PBC has activated an emergency plan in time, enhancing maintenance of key infrastructure and key positions in the financial system and requiring staff to keep watch around the clock. Key financial infrastructure across the country such as payment and clearing, treasury, currency issuance, credit system, accounting, custody and clearing remains secure and stable, and financial market businesses including inter-bank bond market, foreign exchange market, bill market and gold market are carried out as usual, indicating the technical guarantee capabilities and the emergency mechanism of the financial industry have stood the test of the epidemic. Financial infrastructure institutions, commercial banks and non-banking payment institutions have lowered charge standards, reducing or waiving service fees for payment and clearing. Shanghai Clearing House, Shanghai Gold Exchange, China Central Depository & Clearing Co., Ltd. (CCDC) and Shanghai Commercial Paper Exchange Corporation Ltd. have reduced and waived over 20 kinds of charges. China UnionPay has reduced or waived service fees for hospitals and charities involved in epidemic prevention and control across China and refunded micro and small merchants the service fees in proportion to the amount collected through UnionPay QR code-based collection service. NetsUnion Clearing Corporation (NUCC) has waived network service fees for non-profit medical institutions and charities for bar code-based collection, clearing and payment services. 15 national commercial banks have waived service fees for all donations in support of epidemic control. Tenpay and Alipay have waived merchant service fees for non-profit medical institutions and reduced or waived commissions for providers of courier services and food delivery services.

In our battle against the epidemic, many Party officials and staff of the PBC and financial institutions have overcome difficulties and remained at their posts with great courage, making significant contributions to the timely implementation of the financial policy in support of epidemic prevention and control, and early resumption of work in companies, and ensuring basic financial services to the public. At this critical moment of the battle, the PBC will not let the Party and people down, and we will resolutely implement the decisions and arrangements of the CPC Central Committee with Comrade Xi Jinping at its core, carry out 30 initiatives for the financial system to support epidemic prevention and control, and support well-prepared companies to reopen as soon as possible, so as to ensure stable economic performance, minimize the impact of the epidemic and achieve all targets set by the CPC Central Committee.

Thank you.

Hu Kaihong:

Thank you, Mr. Deputy Governor. Now let's welcome Vice Chairman Liang Tao to give us a brief introduction.

Liang Tao:

Ladies and gentlemen, good morning. On behalf of the CBIRC, I would first like to thank you for your long-term support for our work. Since the outbreak, we have followed Secretary-general Xi Jinping's instructions and replies, and implemented the decisions and arrangements of the CPC Central Committee and the State Council, coordinating financial services that support epidemic prevention and control as well as economic and social development, and supporting companies to reopen, so as to do our bit for the victory of this people's war, total war and defense war. Now let me highlight our work priorities as follows:

First, we have strengthened Party leadership. The Party Committee of the CBIRC and Party organizations at various levels in the system have taken on their responsibilities to fight the epidemic, making epidemic prevention and control our top priority and implementing the policies without compromise. We have required Party leaders and officials at different levels to remain at their posts, take the lead and set good examples, so as to ensure that they take up their responsibilities that are clearly defined and play their due roles in the battle, avoiding formalism and bureaucracy.

Second, we have strengthened policy support. Since the outbreak, the CBIRC has responded quickly, introducing a series of support policy measures since January 26, and raising clear requirements on banking and insurance institutions in supporting epidemic prevention and control and improving financial services. Agencies at different levels also have stepped up implementation and introduced strong financial support policies separately or in partnership with local government authorities.

Third, we have provided differentiated and preferential credit support. We have driven banking institutions to step up support for affected areas through adjusting the regional financing policy, internal fund transfer pricing and performance review. We have forbidden banks from calling in loans prematurely from, stopping providing loans to or putting pressure for loan repayment by industries hit hard by the epidemic including retailing and wholesaling, accommodation and catering, logistics and transport, culture and tourism, and promising businesses that are currently in trouble due to the epidemic, especially micro and small businesses. We have allowed rollovers or renewals of loans for businesses that have difficulty paying their due loans because of the epidemic. By properly lowering loan rates, increasing credit loans and mid and long-term loans, we have supported relevant companies to reopen to battle the epidemic. As of 12 noon on February 14, banking institutions had provided more than RMB 537 billion of credit to support the battle.

Fourth, we have put the protection roles of insurance into play. We have driven insurance institutions to simplify processes and increase efficiency for claims from customers infected with COVID-19 or incurring losses due to the epidemic, and to compensate them as early as possible, if the claims are reasonable. We have actively expanded the liabilities of insurance products, lowered claims criteria, and provided free insurance products to frontline workers. We have offered producers of key medical supplies the insurance products for safe production and against the infection risk to support them to reopen for businesses. Initial statistics show that, without increasing premiums, 35 life insurance companies have expanded the coverage of 400-odd accident insurance and illness insurance to include deaths, injuries and critical illness caused by COVID-19. 74 insurance companies have offered for free various insurance products worth nearly RMB 9 trillion in total to healthcare workers involved in the fight against the epidemic, their families and disease control staff, including accident insurance and term life insurance.

Fifth, we have strived to increase efficiency and quality of financial services. We have expanded online financial services and boosted banking and insurance institutions to improve service management and protection for electronic channels including internet banking, mobile banking and mini programs, optimizing and diversifying non-contact service channels and scenarios. We also have flexibly adjusted arrangements for credit repayment including housing mortgages and credit cards, and extended deadlines for repayment for customers temporarily having no source of income due to the epidemic.

Next, we will continue to implement the decisions and arrangements of the CPC Central Committee and the State Council. We stand ready to work together in full confidence to adopt precise policy measures and a scientific approach to contain the virus, guiding financial institutions to further implement relevant policies. With synergies between banking and insurance institutions, we will go all out with a wartime mindset to ensure quality financial services to make greater contributions to epidemic prevention and control, stable economic growth, as well as social harmony and stability.

Thank you.

Hu Kaihong:

Thank you, Mr. Vice Chairman. Now I will give the floor to Vice Chairman Yan Qingmin.

Yan Qingmin:

Friends from the media, good morning. On behalf of the CSRC, let me extend sincere thanks to you and your fellow reporters for your long-term support for the CSRC and your attention to the capital market.

Since the outbreak, we have followed Secretary-general Xi Jinping's instructions and replies, the decisions and arrangements of the CPC Central Committee and the State Council, and focused our efforts on supporting epidemic control and economic growth, and guarding against risks under the direction of the Financial Stability and Development Committee under the State Council. Now allow me to highlight five aspects of our work as follows:

First, we ensured the opening of stock markets on February 3. There was a heated debate on the time of opening. Based on comprehensive assessment of different ideas and trade-offs, we eventually decided to open the markets on February 3. This represents our respect for market laws and transaction rules as well as our mission and responsibility. Since the opening of the stock markets, we have seen effective self-adjustments of the markets, smooth transactions by investors, and stable market expectations, as a result of policy coordination and collaboration among different departments. Having stood the tough test of the epidemic, A-share markets have been back to normal.

Second, we have focused on preventing risks in this special period. To address the liquidity difficulties of companies and individuals during the epidemic to avoid unusual market fluctuations, we have taken various measures based on the impact on affected areas, including allowing market players to roll over their stock pledge agreements, abandoning mandatory reverse position closing towards some securities margin trading customers and extending the time for customers to add collaterals. The size of the stock pledging business is currently steady with a slight decline, with the balance of onsite share pledge financing reaching RMB 880 billion, down by more than 45% from the peak value. The balance of total securities margin trading approximates RMB 1.05 trillion, accounting for 2.13% of the circulation market value of A shares. Relevant risks are under control. Moreover, we have suspended overnight futures trading and encouraged offsite securities trading in case of infections in crowded places.

Third, we have prioritized financing by regions hit hard by the epidemic and companies involved in epidemic control. We have simplified procedures and adopted special approaches to special cases, supporting relevant enterprises in severely-affected areas to issue corporate bonds and asset-backed securities. As of February 14, DDMC, Wuhan Sishui, and Xiangyang Dongjin State-owned Assets Investment, who are registered in Hubei, have issued their bonds through the easy access, planning to raise funds of RMB 2.8 billion. The 10 corporate bonds and one ABS they have issued are valued at RMB 11.23 billion in total. Part of funds raised will be used for epidemic prevention and control. Two additional local companies also have been approved to issue bonds and several special funds for epidemic control are to be issued. We have also offered easy access to filing drug and health private equity funds and venture capital funds, so as to guide more private capital to flow into producers of medical supplies for epidemic control. Incomplete statistics show that equity funds and venture capital funds had 46 investment projects in the pipeline for the battle against the epidemic by February 12, which were valued at RMB 17.046 billion.

Fourth, we have launched convenient regulatory measures in time. For example, we have extended the license validity for financing through stocks and bonds, relaxed the time limits for M&As, allowed affected listed companies to postpone regular disclosures of their reports, and eased the requirements on risk control indicators that securities companies fail to meet at the moment. We also have waived the annual fees for local listed companies and those listed on NEEQ, and the annual membership fees and seat fees for local futures companies to show our care for them as a regulator. We have supported securities companies to raise funds through financial bonds on the inter-bank and exchanges markets to enhance risk resilience of institutions in the industry.

Fifth, we have called on listed companies, and securities and futures industries to perform their social responsibilities. While ensuring epidemic prevention and control in the CSRC system, we have guided listed companies, securities and futures institutions to support epidemic prevention and control, ensure operations and perform their social responsibilities. Hundreds of listed companies have provided donations worth more than RMB 5 billion, and securities, futures, mutual fund and private fund companies have provided donations worth RMB 900 million in total. Listed companies of medical and equipment supplies have accelerated the production and R&D of protective, test and treatment products against the COVID-19, and listed logistics and construction companies have played a critical role in the delivery of supplies and construction of designated hospitals.

Next, we will continue to implement Secretary-general Xi Jinping's instructions and replies and the decisions and arrangements of the CPC Central Committee and the State Council to contribute greater to epidemic control, economic growth and risk mitigation. At last, I'd like to extend thanks to you again, with all my heart.

Hu Kaihong:

Now I will give the floor to Deputy Administrator Xuan Changneng.

Xuan Changneng:

Friends from the press, good morning. Since the outbreak, we have followed Secretary-general Xi Jinping's instructions on epidemic prevention and control, and the arrangements of the Leading Group of the CPC Central Committee for Epidemic Prevention and Control and the Joint Prevention and Control Mechanism of the State Council, and taken effective measures to battle the epidemic and support enterprises to reopen, under the direction of the Financial Stability and Development Committee under the State Council. Now let me highlight our efforts as follows:

First, we have offered convenient foreign exchange policies to support epidemic prevention and control. We have simplified requirements on foreign exchange payments for the imports of supplies necessary for epidemic prevention and control, foreign exchange receipts from donations, receipts and payments under the capital account and cross-border financing. Our branches and sub-branches across China including Hubei have directed banks to adopt special approaches to special cases and quickly handle urgent cases. From January 27 to February 12, we handled 1,370 transactions across China in accordance with the convenient policies, including 70 payment transactions for the imports of supplies in Hubei, mainly including masks, protective gowns and production materials.

Second, we have optimized foreign exchange-related government services, supporting market players to handle foreign exchange businesses through non-contact channels, such as online channels, booking and mailing. Major services such as settlement and sales of foreign exchange for individuals, overseas transactions by bank card, trade in goods and in services, external debt registration can all be handled through the online business system, "ASOne". 86% of administrative foreign exchange permits can be applied on the "Online Application System for Government Services of the SAFE". 479 applications were accepted and 466 were handled by the system from January 27 to February 12.

Third, we have ensured normal requirements for foreign exchange like paying tuitions for overseas study by individuals, encouraging individuals to handle them online, with no need to "go out". From January 27 to February 12, residents in China handled 915,000 foreign exchange transactions through banks, including 830,000 online transactions, accounting for 91%, higher than 61% in 2019.

Fourth, we have guided Shanghai Clearing House and China Foreign Exchange Trade System to reduce or waive foreign exchange trading and clearing fees for institutions in Hubei.

Thank you.

Hu Kaihong:

Now we will take your questions. Please remember to tell us the news agency you represent before asking your questions.

China Media Group CCTV:

I am concerned about resumption of work. What policies or measures are in place to support enterprises that have been hit hard by the epidemic to reopen for businesses? What measures are available to support those that are not critical for epidemic prevention and control to restart?

Liang Tao:

Since the outbreak, banks have offered differentiated, targeted and preferential financial services to seriously affected regions, industries and enterprises. They have supported them by allowing credit restructuring and reducing or waiving interest on overdue payments based on specific situations, without prematurely calling in loans, stopping providing loans or putting pressure for loan repayment for no good reasons. Many banks have introduced policies on reducing loan interest and waiving relevant fees, which provide a strong support for key enterprises in the battle. The CBIRC has recently studied the impact of the epidemic and prepared for launching new policies. They will introduce some new measures soon for enterprises in both affected and unaffected industries.

Next, our focus will be on the following:

Firstly, we will step up efforts to support affected micro and small private businesses. At first, we will follow the requirements of increasing quantities, expanding scope, reducing prices and enhancing quality to ensure micro and small businesses' overall credit growth will be safe from the epidemic. Second, we will ensure that the integrated financing costs of inclusive lending to micro and small businesses will decline further from a year earlier. Third, we will properly optimize and simplify business processes based on micro and small businesses' changing financing demands during the epidemic. Fourth, we will work to ensure loan renewals more precisely, which has attracted wide concern, so as to relax liquidity pressure on troubled micro and small businesses. Fifth, as the epidemic progresses, we will implement relevant systems to ensure risk management and that no one who has fulfilled their duties will be held liable for anything beyond their control, so as to create an environment where bank branches and sub-branches are eager to lend and unafraid of NPL. This matters for it can boost head offices to raise tolerance towards NPLs of hard-hit branches and sub-branches.

Secondly, we will provide more credit protection and issue more credit in support of resumption of work in key areas. We will guide financial institutions to further strengthen credit support for enterprises to reopen, increase the proportions of credit loans and mid and long-term loans to enterprises and help them to keep financing cost within a reasonable range. Considering that enterprises may need money to buy raw materials and equipment after reopening, we will properly strengthen loan support to relieve them of liquidity pressure. We will also guide institutions to use performance review as a yardstick to properly incorporate the efforts to support manufacturers, micro and small businesses and private enterprises in key areas to reopen as KPIs or properly adjust weights to arouse enthusiasm in outlets and frontline sales representatives.

Thirdly, we will accelerate construction of key projects. First, by making better use of the adjusting role of policy-based finance against business cycles, we will quicken the credit issuance cadence, properly increase RMB loans and debts policy-based financial institutions plan to issue in 2020, optimize the regional credit structure, and accelerate credit issuance to a host of key projects in key areas. Second, we will study how to use special construction funds already recovered to support key areas like manufacturing, increase the restarting rate of newly invested projects and ensure projects under construction are sufficiently funded.

Fourthly, we will work to promote stable consumption and accelerate the unleashing of potential demands among residents. For hard-hit service sectors such as retailing and wholesaling, accommodation and catering, culture and tourism, transport and logistics, we will urge banks to develop special credit products to satisfy their financial needs, and will boost the quality enhancement and expansion of service consumption, the increase of spending on goods in kind, and the improvement of service scalability and convenience to unlock the potential for new consumption at a faster pace. Thank you.

Xuan Changneng

I'd like to add a few words. At this critical moment of epidemic prevention and control, the Joint Prevention and Control Mechanism of the State Council, guided by the decisions and arrangements of the CPC Central Committee and the State Council, has raised specific requirements on intensifying epidemic prevention and control in a scientific approach, and allowing enterprises to reopen in a classified and orderly way. The SAFE system, driven by a strong sense of responsibility and mission, will play their due roles in supporting resumption of work and recovery of social and economic order.

First, we will offer easy access to foreign exchange services to efficiently facilitate resumption of work in service firms. For foreign exchange services involved in the trading and investment activities delayed by the epidemic, imports of key supplies and exports of products after companies reopen, and increase of supply by producers and distributors of key supplies needed to battle the epidemic, the SAFE will direct banks to adopt special approaches to special cases and quickly handle urgent cases, by simplifying processes and accelerating processing speed, to boost quick recovery of trading and investment activities and strengthen support for Hubei, key industries and companies.

Second, we will implement the 12 trade and investment facilitation initiatives adopted by the executive meeting of the State Council. These initiatives contain 6 cross-border trade and investment facilitation initiatives, such as expanding the piloting for facilitation of foreign exchange receipts and payments for trade, simplifying procedures of foreign exchange receipts and payments under trade in goods for micro and small cross-border ecommerce players, and optimizing the reporting approach regarding foreign exchange services for trade in goods, and 6 cross-border investment and financing facilitation initiatives, such as expanding the piloting for facilitation of receipts and payments under the capital account, reforming external debt registration management for enterprises, and relaxing restrictions on the number of foreign exchange accounts opened for the capital account. Since the launch of these facilitation initiatives, the processing time and labor costs of enterprises have been reduced dramatically, cross-border trade, investment and financing have been made easier, and the business environment has become more favorable, greatly benefiting trade, investment and the real economic growth. Next, considering the actual needs for epidemic control and resumption of work, we will push ahead with the implementation of the 12 initiatives, and focus our support on hard-hit industries and enterprises, especially private companies, and micro, small and medium businesses.

Third, we will apply technologies to facilitate cross-border trade, investment and financing by micro, small and medium companies, and foreign exchange settlement for them. On the one hand, we will step up building of the cross-border financial blockchain service platform to address the difficulty and high cost for SMEs to access financing. The SAFE began piloting the platform last March and had rolled it out to 22 provinces, autonomous regions and cities as of February 3 this year. With more than 170 corporate banks joining, the platform had issued a cumulative lending of USD 15.9 billion to nearly 2,500 companies, of which 75% were SMEs. Since the Chinese New Year, the platform has handled 171 lending transactions worth more than USD 200 million and served 87 companies. In particular, after Hubei was included in the piloting scope this January, foreign-related companies in the province, especially SMEs, will be entitled to more preferential policies on financial credit support, such as trade financing for exports. On the other hand, we will further simplify procedures to handle receipts and payments under trade in goods for micro and small cross-border ecommerce players, facilitate foreign exchange settlement for cross-border ecommerce, direct banks and payment institutions to handle electronic payments under the current account for market players based on the electronic transaction information, and facilitate foreign exchange settlement under cross-border ecommerce trade for micro, small and medium businesses to help them increase funds settlement efficiency.

Fourth, we will optimize foreign exchange processing measures to offer convenience to the public. We have published the operation processes for the "Online Application System of Government Services of the SAFE" to make it easier for people to apply online for foreign exchange administrative permits. Thank you.

Nihon Keizai Shimbun (Nikkei):

This epidemic has dealt a big blow to micro and small businesses. Some local regulators have introduced policies of increasing tolerance to NPLs of micro and small businesses. What would you say about these policies? Thank you.

Liang Tao:

Thank you for your question. I will answer you from three dimensions. First, regulatory rules need to stay stable, which is the minimal requirement of prudent regulation. Its purpose is to ensure risk resilience of financial institutions and stability of the financial system, avoiding their changes with external changes. Second, at a certain point of time, when the operating environment of banks is suddenly changed, especially due to the occurrence of Force Majeure events, banks will face the pressure to meet regulatory indicators. Third, for affected banks, the CBIRC, the regulator, will face the facts and take the real impact of the epidemic into account to properly enhance regulatory tolerance, extend a grace period for banks to meet the regulatory indicators or allow certain flexibility during the implementation of regulatory measures. Thank you.

China News Service:

I have some questions for Mr. Yan. You've just said that many measures have been introduced, and I wonder what more measures will be launched to use the roles of the capital market to ensure stability of the real economy. We also want to know more about the capital market reform, especially the registration-based IPO system reform. I wonder whether the cadence and speed of these reforms will be impacted by the epidemic.

Yan Qingmin:

Following the decisions and arrangements of the CPC Central Committee and the State Council, and the guidance of the Joint Prevention and Control Mechanism of the State Council, the CSRC has introduced some measures to support epidemic control since its outbreak. As for next steps, the CSRC will continue to implement the requirements raised by Secretary-general Xi Jinping at the meeting of the Standing Committee of the Political Bureau of the CPC Central Committee on February 12 to win this people's war, total war and defense war. We will continue to make use of the capital market to support the real economy. Our measures can be summarized as "four continues" as follows:

First, we will continue to ensure market stability. We will track and analyze market performance and take steps with relevant authorities to mitigate risks in key areas including equity pledge, securities margin trading, and bond defaults to boost market stability. Following the guideline of promoting development and stability through reforms, we will deepen the reform in all aspects while stabilizing market performance. In accordance with the requirements raised at the Central Economic Work Conference, we will step up construction of basic systems and strengthen market resilience.

Second, we will continue to make use of the functions of the market. We will make IPO a normal to satisfy financing needs of the real economy. By deepening the market-based M&A reform and diversifying payment and financing instruments, we will endeavor to better support industry upgrading. We will also use the roles of exchange bond markets in financing to innovate the approach to increasing credit and debt financing instruments for private companies and lower the barriers for issuing convertible bonds. By supplying more commodity and financial futures and options, we will use the roles of futures markets to help physical entities address high inventories, shortage of raw materials and fluctuating prices. Some players have set good examples in the futures market recently. Moreover, we will optimize the reverse linkage system in support of holdings cut by venture capital funds and make use of private funds' roles in boosting the formation of innovative capital. We will encourage more private funds and venture capital funds to invest in production and R&D companies of reagents, drugs and medical facilities to support epidemic prevention.

Third, we will continue to ensure the implementation of policies already introduced. Based on implementing the circulars and policies introduced by five ministries and commissions, we will further study support measures to help physical companies to reopen. We will offer easy access to financing approval and filing, allowing review, registration and filing on a priority basis for businesses registered or operating in Hubei, key players providing supplies for prevention and control of the epidemic, and the IPO, refinancing, bond issuance and M&As with raised funds dedicated to the prevention and control of the epidemic. Last night, the CSRC released on its website the revised refinancing rules. We must ensure rigorous implementation of the refinancing system to meet listed companies' needs for funds. We will further strengthen the capital strength of financial institutions including securities funds and make use of their professional advantages to offer financial services to companies in seriously affected regions.

Fourth, we will continue to accelerate and deepen reform and opening up. The impact from the epidemic will be short-lived. We will not change our direction and determination to advance reform and opening up. While supporting epidemic prevention and control, the CSRC will boost the implementation of measures for the comprehensive deepening of the capital market reform to better support the growth of the real economy, based on the supply-side structural reform in the financial community. Our priorities include:

First, ensuring the construction of a multi-level capital market system. We will continue to press ahead with system innovation in the STAR market based on its positioning, and encourage more hard & core technology companies to list, while advancing the STAR market reform and piloting the registration-based IPO system. We will also boost the stable implementation of the NEEQ reform and coordinate the advancement of system innovations like public offering and investor suitability.

Second, ensuring the vigorous development of direct financing. We will continue to normalize IPO, and implement the revised refinancing system to improve inclusiveness.

Third, ensuring improved quality of listed companies. We will refine the diversified exit mechanism, enhance the information disclosure quality, and improve listed companies' governance capabilities to drive them to compete, with the inferior to be eliminated.

Fourth, ensuring law-based administration of the capital market. With the implementation of the new securities law as a big opportunity, we will establish and revise supporting regulations and systems and optimize the governance system of the capital market to make the most of laws and regulations to drastically increase the cost of violations.

Fifth, ensuring the expansion of mid and long-term fund sources. We will increase the share of equity funds, expand the piloting scope of the investment advisory business of mutual funds, encourage and support the market entry of mid and long-term funds including social security fund, insurance and pensions, and boost the implementation of the policy for investing in mutual funds via the tax-deferred individual pension account.

The Economic Daily:

I have some questions for Vice Governor Fan Yifei. Rumor has it that paper currency may be infectious. How do you ensure the safety and hygiene of paper currency we use? People have found the convenience of non-cash payment during the outbreak. What would you do next to make the most of mobile payment to make life easier for consumers? Thank you.

Fan Yifei:

How to ensure the safety and hygiene of paper currency has concerned us since the outbreak, and we have taken some measures to address this issue. First, we have worked to insure the supply of new banknotes. Before January 17, the PBC transferred nearly RMB 600 billion of new banknotes across China and issued RMB 4 billion to Wuhan before the Chinese New Year, strengthening the sense of security among bank staff and consumers handling the cash business. Second, we have properly transferred new banknotes in a scientific approach. We have suspended cross-province cash transfers and in-province transfers in selected seriously affected regions to reduce people flows and the risk of infection in transit, and curb transmission. Third, we have endeavored to ensure safety and controllability during the receipt and issuance of paper currency. We require commercial banks to handle cash business in a two-faceted approach. For payment of cash, they should use new currency as much as they possibly can. For receipt of cash, such as those from hospitals and farm produce markets, they should process them in a special approach, separately seal and store them and submit them to the PBC after sterilization. Such cash cannot to be used for payment. In addition, we have issued the Opinion on Increasing Safety to Use Cash during the Outbreak, requiring PBC branches, sub-branches and commercial banks to adopt a classified management approach and introduce differentiated prevention and control measures against the epidemic to ensure the safety to use cash. Cash received from seriously affected regions should be sterilized through ultraviolet or high temperature and stored for at least 14 days before being launched to the market. Cash received from regions not seriously affected should be sterilized and stored for at least 7 days before launch. These measures have proved effective. We will do whatever it takes to ensure people can use sterilized cash safely.

Next, we will further accelerate the development of mobile payment, which has been fast so far. Over the past three years, CAGRs of mobile payment in terms of volume and value rose by 83.5% and 39% respectively, indicating China is at the vanguard of electronic payment. Some new developments have been seen in regions recently. For example, the so-called "non-contact basket" program allows consumers to place orders and make payments on their mobile phones for fresh and affordable food and vegetables, with no need to go out. This has addressed a big problem for common people during the outbreak. In the future, more measures will be taken to encourage online banking and mobile banking to offer around-the-clock services like financial investment, payment of utility bills, and online shopping. The Yunshanfu App offers online payment services such as fund transfers, free credit card repayment, adding credit of mobile phone and payment of utility bills, and enables balance queries with 610 banks across China and credit card bill queries with nearly 150 banks. We will continue to do so in the future. Thank you for your questions.

Market News International:

I have a question for Mr. Xuan. Could you brief us on the expectations of China's balance of payments amid uncertainties in imports and exports?

Xuan Changneng:

China's balance of payments has remained in a basic equilibrium in recent years, reflecting the outcomes of deep economic structural optimization and the reform and opening up policy. Our BOP will not change under the impact of COVID-19 epidemic, which is expected to be short-lived. On the one hand, along with domestic economic growth and structural optimization and adjustment, China's current account has found a stronger equilibrium, with the ratio of its surplus to GDP kept within a reasonable range in recent years. The SAFE released yesterday the preliminary data on last year's Balance of Payments, recording a surplus of USD 177.5 billion under the current account, which accounted for 1.2% of China's GDP. On the other hand, with our dedication to reform and opening up, our economic performance has stayed stable, opening-up has been deepened, mid and long-term foreign capital has flown in steadily and cross-border capital flows have remained in equilibrium.

The impact of the epidemic will be short-lived and limited. Our balance of payments will remain in a basic equilibrium in the future, based on a solid foundation and favorable conditions.

First, the current account is expected to record a slight surplus, based on the following: first, China's manufacturing supply chain is complete and its transformation and upgrading is being accelerated, with relevant products still competitive in global markets. The phase one deal signed by the US and China will support trading between the two sides, boost global confidence in trade, and thus help stabilize China's foreign trade. Second, the deficit under China's trade in services has remained stable in recent years, indicating the changes in residents' consumption concepts and China's improving soft power. This trend will continue in the future. Third, with the outward investment structure continuously optimized, China has witnessed increasing returns on outward investment, so its ROI is expected to improve gradually. Fourth, the savings rate remains above 40%, making China one of the global leaders again, which is favorable for keeping receipts and payments under the current account within a reasonable range.

Second, China's cross-border capital flows will stay stable, based on the following: first, the short-term impact from the epidemic will not change our fundamentals of sustaining sound and high-quality economic growth over the long term. The domestic business environment will improve, which is favorable for stabilizing mid and long-term capital inflows like direct investment, which is expected to remain in surplus. Second, the financial sector will be opened wider steadily, making it attractive to foreign investors and favorable for maintaining net capital inflows under portfolio investment. The opening of the bond market will attract institutions such as foreign central banks to allocate RMB assets in the mid and long term. Hence the stability will be highly ensured. Third, the external debt structure has been optimized. In recent years, external debt has increased as foreign investors increased their holdings of bonds issued by China, and currency and maturity mismatch risks were mitigated, making external debt structure more robust than it was in previous years. Fourth, two-way fluctuations of the RMB exchange rate have delivered positive results in bolstering reasonable market expectations in recent years, with Chinese companies and individuals becoming more sensible in handling foreign exchange deals. Since the outbreak, the overall pattern of two-way fluctuations of the RMB exchange rate has remained unchanged, and the supply and demand on the foreign exchange market have remained in equilibrium, suggesting China's foreign exchange market is maturing, which is favorable for ensuring stable and orderly cross-border capital flows.

Overall, China's balance of payments has remained in a basic equilibrium amid the complex and changing external environment, indicating strong adaptability of China's financial system and a robust foundation for maintaining internal and external equilibrium and stability of China's economy. Going forward, we are capable and confident of coping with the impact of internal and external disturbances to ensure the equilibrium and stability of China's balance of payments. Thank you.


I have recently learned from a media report that this epidemic leaves acquisitions and IPOs plunging, so I wonder whether the impact of the epidemic has been assessed and how to deal with it in the future? Thank you.

Yan Qingmin:

As it is difficult to perform onsite due diligence, audit and assessment during the epidemic, part of stock issuance and M&As have been impacted. Therefore we have introduced some targeted measures, such as extending the timeframes for issuers to give feedback and for M&As. For reviews, we have worked to ensure three "as-usuals": first, verifying IPO approvals as usual; second, advancing review progress as usual; third, pushing ahead with M&A permission and acceptance as usual. Thank you.

China Daily:

At this critical moment, people may be concerned about handling financial businesses on the spot. Do banking and insurance institutions have any special measures in response? How do you protect them when they are handling financial and insurance businesses on the site? Thank you.

Liang Tao:

In the face of this epidemic, it is understandable that people are concerned about handling businesses on the site. How to address their concerns? The CBIRC has pushed banking and insurance institutions to meet people's financial needs by offering innovative services. The measures we have taken include:

First, properly scheduling outlets' operations to ensure customers' basic financial needs are met. To support epidemic prevention and control, banking and insurance institutions make proper schedules for operating outlets, announcing in advance the outlets with businesses temporarily suspended or with operating time changed, and identifying nearby outlets that are operated as usual. On top of that, banking and insurance institutions ensure cleaning and sterilization of these outlets. They require their people to sterilize counters, ATM booths and self-service equipment more frequently, and repair self-service equipment in time to ensure secure, efficient and non-stop operation of such equipment.

Second, ensuring smooth handling of online businesses. We guide banking and insurance institutions to step up promotion and functional optimization of online products, such as mobile banking, online banking, WeChat Bank and the Living Bill Platform. They offer 7×24 online financial services to minimize offline contacts and the risk of infection and meet customers' financial needs online, saving them from going out. Some banks significantly expand online lending, encouraging and guiding customers to apply for, use and pay loans online. They also enable online transfers, repayments, payments, balance queries, checking, printing of receipts and payroll services so as to mitigate the risk of cross-infection. Statistics from the China Banking Association show that online services of banking institutions have replaced 96% of offline services on average. Insurance institutions are also active in promoting online services for underwriting, renewal, preservation and claims settlement through mobile APP and WeChat official account, in a bid to provide seamless one-stop services with no contact and no risk. Insurance staff guide customers online to complete procedures of auto insurance renewal, preservation and claim settlement, enabling customers to experience the new face-to-face online services.  

Third, optimizing financial services for individuals. Many banks have introduced special policies for healthcare workers and epidemic control workers who have participated in epidemic prevention and control, stipulating that overdue personal loans and overdraft lines of credit during the outbreak will not be regarded as defaults, thus intensifying credit protection of people involved in epidemic prevention and control. For customers losing the source of income due to the epidemic, banks flexibly adjust the repayment deadlines for personal credit such as housing mortgages and credit cards, or rationally extend the maturity. Insurance institutions compensate customers infected with COVID-19 or incurring losses due to the epidemic as early as possible, if the claims they lodge are reasonable. They also have expanded insurance liabilities, including COVID-19 in the scope of insurance and protection, and relaxed restrictions on waiting period, deductibles, compensation ratio, and designated hospitals.

Fourth, offering easy access. Banking and insurance institutions offer easy access to support epidemic control, requiring no queuing and allowing prioritized handling of remittances or transfers to affected regions. They offer accelerated and fast handling of urgent withdrawals to companies and individuals. They provide home and onsite handling for customers with special needs. They waive service fees for donations into special accounts or remittances and transfers of special funds in support of epidemic prevention and control.

Thank you.

Hu Kaihong:

We will take two more questions as time is running out.

Bloomberg News:

I have some questions for Mr. Deputy Governor. Both the demand and supply sides are now under heavy pressure due to the outbreak. Will this put pressure on inflation? What measures will the PBC adopt to prevent surges in inflation and CPI, including PPI? My second question is about non-performing loans. Will banks' NPLs soar in all economic areas due to the epidemic? What measures should Chinese government authorities take in response? Will they strive to prevent large-scale layoffs and bankruptcy?

Fan Yifei:

As for inflation, since full resumption of work takes time, prices are under pressure from the demand side and other aspects. But the prerequisite of ensuring prudent monetary policy hasn't changed and will not change. We will take timely measures to address these issues and we are confident large-scale inflation will not happen in China.

As for NPLs, Vice Chairman Yan Qingmin and Vice Chairman Liang Tao have mentioned that we will make adjustments to commercial banks' NPLs in the near future, allowing certain increase in NPLs. We are convinced that this problem will be properly solved.

We have stepped up financial risk governance over the past two years. NPL is also a problem we are striving to solve. Overall, the NPL ratio is relatively low. Therefore, we have much room for adjustment compared with the rest of the world. We are confident that we will properly address this problem.

CRI of China Media Group:

Vice Chairman Liang Tao has just mentioned that many insurance companies have expanded the liability scope of liability insurance products like accident insurance and illness insurance to include compensation for deaths and injuries caused by COVID-19. I wonder how you will settle claims from COVID-19 patients? When will you compensate them? Could the CBIRC give some advice on how to select appropriate insurance products? Will the life protection scheme launched by many insurance companies against COVID-19 be implemented? Thank you.

Liang Tao:

Thank you for your questions, and thank you all for your attention to insurance. This suggests that your awareness of insurance is rapidly rising. Since the outbreak, insurance companies have supported epidemic control by offering easy access to claims settlement, expanding the protection liability of their products and donating insurance products. Figures will not be mentioned again here. Most of these insurance companies have lowered claims standards, relaxed restrictions on waiting period, deductibles, compensation ratios and designated hospitals, and simplified or canceled requirements on paper materials for claimants who have been infected with COVID-19. Instead, they settle claims online or through compensation in advance. For your first question, I'd say that a claim can be settled on the day it is lodged if the account information of the insured or the beneficiary is provided. Compensation for extended liability insurance or donated insurance could also be provided in time. For patients who are isolated for treatment, compensation in advance or relief funds would be provided. For specific way of compensation, please contact the call centers of insurance companies as their procedures may slightly differ.

For your second question, I'd say that life insurance is a diversified and inclusive product to insure people's life or body against risks associated with one's subsistence, ageing, illness, death and disablement. The medical expenses for the treatment of COVID-19 will be partly reimbursed by the national basic medical insurance scheme and partly paid by government finance in the form of subsidies. So patients' medical expenses are guaranteed. Given this, we recommend that, based on their payment power or needs, consumers should buy medical insurance with wider coverage of illnesses, or buy critical illness insurance or life insurance to insure against critical illnesses or deaths, which may be costly or lead to household income losses.

Let's move on to your third question. Some consumers are interested in special insurance products against COVID-19 as mentioned by some companies. But for lack of pricing data base and to protect consumers' interests, the CBIRC forbids insurance companies from developing such single liability products. Insurance companies have extended liabilities of more than 400 kinds of existing insurance products, as mentioned earlier, and they can cover risks of critical diseases, disability and death caused by COVID-19. For details, consumers can search for insurance companies' relevant announcements on their websites.

Next, the CBIRC will continue to support and encourage insurance companies to extend insurance liabilities of existing products, donate, if possible, related insurance products to frontline workers battling the epidemic and step up policy execution and regulation. We will urge insurance companies to implement underwriting and claims settlement services. Meanwhile, we will boost product innovation and diversification of insurance liabilities to provide consumers with better insurance products and address their concerns. Thank you.

Hu Kaihong:

Another press conference is to be held here in the afternoon to introduce how to prevent and control the spread of the virus as people return from their new-year holiday. You are welcomed to attend the conference. For now, I have to conclude this conference here. Thank you.

 (The original text is available at



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