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. 2020-05-13/fujian/2020/0513/1170.html
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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. CBN TV: 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 www.china.com.cn) 2020-02-15/en/2020/0215/1637.html
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The State Council Information Office held a press conference at 10 am on Sunday, March 22, 2020. Chen Yulu, Deputy Governor of the People's Bank of China (PBC), Zhou Liang, Vice Chairman of China Banking and Insurance Regulatory Commission (CBIRC), Li Chao, Vice Chairman of China Securities Regulatory Commission (CSRC) and Xuan Changneng, Deputy Administrator of the State Administration of Foreign Exchange (SAFE) were invited to introduce how they have responded to the pandemic to ensure financial market stability and then they took questions from the press. The full text of the conference is as follows: Hu Kaihong: Ladies and gentlemen, good morning. Welcome to this press conference of the State Council Information Office. We are pleased to have with us here Mr. Chen Yulu, PBC deputy governor, Mr. Zhou Liang, CBIRC Vice Chairman, Mr. Li Chao, CSRC Vice Chairman, and Mr. Xuan Changneng, SAFE Deputy Administrator. They will introduce how they have responded to the coronavirus to ensure financial market stability, and then they will take your questions. Now I will give the floor to Mr. Chen. Chen Yulu: Friends from the press, good morning. Under the strong leadership of the CPC Central Committee with General Secretary Xi Jinping at its core, China has achieved significant progress in epidemic prevention and control, with the work resumption rate on the rise and people's lives gradually back to normal. To support epidemic prevention and control and businesses' resumption of operations, the financial system, guided by the decisions and plans of the CPC Central Committee and the State Council, has responded early, acted quickly，implemented precise policies and introduced a host of effective policy measures. The PBC has funneled short, middle and long-term liquidity through accurate public market operations and targeted RRR cuts, ensuring proper and abundant liquidity in the banking system and scheduled opening and stable performance of financial markets. It has offered RMB 300 billion special re-lending and extended limits of re-lending and rediscount by RMB 500 billion, providing a strong and precise support for epidemic prevention and control and resumption of work. We have worked with government authorities like the CBIRC to offer loan rollovers and renewals to hard-hit micro, small and medium businesses and private firms, helping them keep cash flows stable to get through the crisis. We also have guided market interest rates down to reduce financing costs for the real economy. These measures are paying off. China has witnessed the generally stable financial system, stable expectations of financial markets, and stable and fast growth in monetary credit. China's economy has survived the shock and contributed greatly to the economic and financial stability across the world. In our battle against the coronavirus, financial workers have worked strenuously and even made heavy sacrifices as many financial services required them to go to the front line. Up to now, the financial system has recorded 1,137 infections, including 42 deaths. During the outbreak, the financial system has upheld the leadership of the Party and strengthened Party building, shoring up the confidence of frontline financial workers in the Party. Many excellent Party members, outstanding figures and typical events have emerged, delivering on their oath of "keeping in mind our Party’s founding mission". Along with the global spread of the virus recently, global financial markets have become increasingly volatile and the world economy has been under heavier downward risk. This global situation has posed new challenges to China's economic growth. Nevertheless, the epidemic has abated and remained stable in China, the real economic activities are improving and the fundamentals sustaining sound economic growth over the long term have not been changed. Guided by the decisions and plans of the CPC Central Committee, existing policy frameworks, and the marketization and rule of law principles, the financial system will become more upbeat to accurately understand the progress of epidemic prevention and control and economic situations, and adjust the intensity, cadences and priorities of policies at a proper time in response to real situations. We will actively partner with the global community based on the progress of epidemic prevention and control and economic developments in China to cope with challenges posed by complex situations. Thank you. Hu Kaihong: Thank you, Mr. Deputy Governor. Now let me give the floor to Vice Chairman Zhou Liang. Zhou Liang: Friends from the press, good morning. The global spread of the virus has left global financial markets highly volatile, causing wide concern in society. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the Chinese people have worked as one, achieving significant progress in the prevention and control of the epidemic in China, and boosting the resumption of work and normal lives. Guided by the unified arrangements of the CPC Central Committee and the State Council, the CBIRC has worked to ensure epidemic prevention and control and financial services, adopting a large array of effective and strong measures to guide banking and insurance institutions to support resumption of work and safeguard financial market stability. Therefore, the banking and insurance industries remain robust now. Next, we will follow the instructions of General Secretary Xi Jinping on boosting epidemic prevention and control, economic and social development to do so. At the same time, we will closely watch the course of the pandemic and the developments in global financial markets to safeguard our bottom line against systematic financial risk. While implementing existing measures, we will get well prepared in terms of policy to make the most of finance. We are fully confident in winning this people's war, total war and defense war to keep the economy and society stable. Thank you. Hu Kaihong: Thank you, Mr. Vice Chairman. Now let me give the floor to Vice Chairman Li Chao. Li Chao: Friends from the press, good morning. With the global spread of COVID-19, global financial markets have been dramatically adjusted, causing widespread concern over the evolution of global financial markets and China's domestic financial markets like stock markets. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the epidemic prevention and control have gained momentum in China, with businesses reopening and people's lives gradually back to normal. All these have played a decisive role in shoring up market expectations. Compared with foreign markets, China's financial markets remain generally stable. Share-A markets show strong resilience and risk resistance capabilities, featuring smaller fluctuations and more sensible investor behaviors. This should be attributed to the deepening of the supply-side structural reform in the financial system, the precautions and a handful of positive and effective risk mitigation measures that we have taken in recent years under the arrangements of the CPC Central Committee and the State Council as well as the direction of the Financial Stability and Development Committee under the State Council. In the capital market, we have reduced market leverage, with total leveraged funds in the stock market down by 80% from the peak of 2015. We have also taken measures like reducing stocks and controlling increments against stock pledge risks, with risk indicators trending upward and the number of companies listed through pledging down by 1/3 from the peak level. We have optimized transaction regulations and increased transparency, thus raising market expectations of regulations. We have continued with reform and opening up in the capital market, such as the launch of the STAR market and piloting of the registration-based IPO system as well as two-way opening measures in 2019. Li Chao: We have released some documents with relevant authorities since the outbreak, highlighting special arrangements in corporate financing in the capital market, support for key regions and industries, fees reduction and exemption, and convenient services. These initiatives, aligned with market laws, show regulators' care to tide businesses and industries over the crisis and strengthen the underlying bases of market operations. While ensuring robust market operations, China's capital market has played its normal roles. In particular, under the instruction and coordination of the Financial Stability and Development Committee under the State Council, share-A markets were reopened as scheduled after the Chinese New Year. With the market regime at full play without administrative interventions, the market's self-adjustment function has been unlocked, maintaining the smooth operations of the financial market and strongly boosting risk mitigation and investor confidence. In the first two months of this year, a total of around RMB 1.3 trillion was raised through equities and bonds traded on the exchanges. Specifically, 38 companies completed IPOs raising RMB 72.4 billion in funds and RMB 90.1 billion was raised through refinancing; and bonds worth RMB 1.1 trillion were issued on the exchanges, up by 30% year-on-year. More important, the efforts to strike a balance between epidemic prevention and control and economic and social development have been proved effective and impactful, with significant marginal changes observed in each indicator for March. Our survey of listed companies shows that the work resumption rate has exceeded 98%, higher than the national average. The financial market abounds with reasonable liquidity and the stock market valuation is at a historical low. Overall, despite the temporary impact from the external environment, the trend that China's capital market will remain stable and sound will not be changed. Thank you. Hu Kaihong: Thank you, Mr. Vice Chairman. Now let me invite Deputy Administrator Xuan Changneng for some remarks. Xuan Changneng: Friends from the press, good morning. Since the outbreak, we have followed General Secretary Xi Jinping's instructions, and the arrangements of the Leading Group of the CPC Central Committee for Novel Coronavirus Prevention and Control, and worked under the direction of the Financial Stability and Development Committee under the State Council to coordinate the epidemic prevention and control with economic and social development, supporting the battle against the coronavirus and resumption of work. Data shows China's foreign exchange market has remained stable in the year to date, despite the epidemic. Now let me highlight our efforts in supporting foreign exchange policies and current situations of China's foreign exchange market. First, our recent work in review. At the SAFE, we have made epidemic prevention and control and supporting the resumption of work our top priority for now. We have listened to businesses' demands, helped them address issues associated with foreign exchange and stepped up support through foreign exchange policies. Firstly, we have continued adopting the convenient policies to support epidemic prevention and control and resumption of work. Secondly, we have raised the macro-prudential regulation parameter to expand the room for cross-border financing. On March 12, the PBC and the SAFE jointly issued a circular to raise the macro-prudential regulation parameter from 1 to 1.25. Accordingly, the upper limit for the weighted balance of cross-border financing risk rose from 2 to 2.5 times of net assets, further expanding the room for cross-border financing for domestic players excluding government financing platforms and real estate developers, which is favorable for SMEs and private firms to raise funds through domestic and foreign channels. Thirdly, we have expanded the piloting of external debt facilitation and supported high-tech players to finance overseas. The piloting scope has been expanded to include Shanghai, Hubei, Guangdong and Shenzhen, and eligible high-tech companies have been allowed to borrow funds of no higher than the equivalent of USD 5 million. At the same time, we have raised the external debt facilitation level for Beijing Zhongguancun Science City Haidian Park to better satisfy high-tech companies' needs for external debt and reduce their financial costs. Fourthly, we have facilitated trade finance by SMEs through cross-border financial blockchain platforms. Second, current situations of China's foreign exchange markets. Overall, China's cross-border capital flows have stayed generally stable and the supply and demand in its foreign exchange markets have been in equilibrium in the year to date, despite the impact from the coronavirus. Firstly, the RMB exchange rate has fluctuated in two ways within a reasonable range. In the year to date, the RMB exchange rate has stayed generally stable. As of March 20, spot RMB transactions inside China had been devalued by 1.4%, while the US Dollar Index had risen by 5.2%. The Emerging Market Currency Index (EMCI) had fallen by 13.4%. Due to the heightened volatility in global financial markets since late February, the spot RMB transactions in China were devalued by 0.7% while EMCI fell by 10% from February 21 to March 20. As of late March, the RMB was much less devalued than the euro and the pound. All these data shows that the RMB exchange rate remained robust in global foreign exchange markets, especially the emerging markets. Secondly, the supply and demand in the foreign exchange market have been in a basic equilibrium. From January to February, foreign exchange sales and settlements by banks in China registered a surplus of USD 20.6 billion, and foreign-related payments and receipts by non-banking sectors recorded a surplus of USD 18.7 billion. Considering other supply and demand factors like forward foreign exchange sales and settlements and options, the supply and demand in China's foreign exchange market has been in balance. Thirdly, China's foreign exchange reserves have stayed generally stable. As of late February, China posted USD 3.1067 trillion in foreign exchange reserves, which was stable. We also have noticed that as the pandemic rages across the world, and crude oil prices plummet in global markets, global financial markets have become more volatile recently. Given this, we will tighten monitoring and give proper response. Next, we will continue to follow the decisions and plans of the CPC Central Committee and the State Council to speed up the implementation of cross-border trade and investment facilitation measures, and continue to optimize the business environment for foreign exchange, so as to better serve the development of the real economy. What's more, we will refine the two-faceted management framework of "macro-prudence + micro-regulation" for the foreign exchange market and guard against cross-border capital flow risks to safeguard the country's economic and financial security. Thank you. Hu Kaihong: Many thanks, Mr. Deputy Administrator. Now we will take your questions. Please tell us the news agency you represent before asking your questions. China Media Group CCTV: I have a couple of questions for Mr. Deputy Governor. Since the second half of last year, China's CPI has been rising and the data for February just released remains high. I wonder how the PBC look at the future trends of CPI? What monetary policy will be introduced to strike a balance beyond "stable growth" and "controlled inflation"? Chen Yulu: The ultimate goal of China's monetary policy is to "keep the currency value stable to boost economic growth", according to the Law of the People's Republic of China on the People's Bank of China. Therefore, the top priority of our monetary policy is to keep the currency value stable, including stable domestic prices and RMB exchange rate if it is reasonable and in equilibrium. Prices are closely related to people's daily lives, which has been borne in our mind when we develop and implement policies. CPI for the whole year of 2019 went up by 2.9%, primarily driven by structural factors, or as is known to us, the short supply of pork and selected foods. As authorities introduced policies to ensure sufficient supply and stable prices and guided market expectations, expectations of inflation remained stable and didn't diverge in 2019. You have just mentioned that CPI for January and February 2020 rose by 5.3% year-on-year. This was caused by the pull of structural factors as well as the virus that has an impact on supply, which means that the increase was structural and temporary. It should be noted that the impact of the epidemic on supply and inflation will last a while yet. As epidemic prevention and control efforts are yielding positive changes and operations are gradually resumed, production and supply of goods will rise. Therefore, we will see a better situation with the prices expected to fall quarter over quarter in the quarters ahead. The key to stable prices is economic fundamentals. Currently China's macro-economy is performing steadily, with total supply and total demand generally balanced, leaving no ground for long-term inflation or deflation. In 2020, a robust monetary policy will become more focused on flexibility and moderation. By ensuring the intensity, cadence and priorities of policies as the epidemic evolves, efforts will be made to balance the growth of M2 and aggregate financing to the real economy with nominal GDP growth. Under this circumstance, we will work to keep prices generally stable, and guard against the combined impact of credit crunch risk and economic downturns, in a bid to strike a balance between stable growth, risk prevention and inflation control. Thank you. Nihon Keizai Shimbun (Nikkei): I have two questions. The first is while global stock markets are in volatility, China's and its RMB exchange rate stay stable. Could you explain why? Second, word has it that China's financial market will become the world's safety haven. Could you brief us on the inflows of foreign capital in China's stock and bond markets? Thank you. Li Chao: Along with economic globalization, it is inevitable and natural that the volatility in global financial markets will impact China's. The direct impact may be as follows: first, the impact on people's sentiment, that is, foreigners' panic may be also felt by domestic investors. Second, the impact on capital flows. Share-A investors have experienced sentimental fluctuations for a short while but have been pacified and become sensible now. For capital flows, I will give you some data in a minute. Anyway, the impact on share-A markets will be limited and the aggregate will not be great. Then, in such a context, why do China's markets stay stable with strong risk resistance capabilities and low volatility? As I have just mentioned, this should be attributed to, for example, supply-side financial structural reform. Actually we have taken some measures in advance, and as a result, some hidden risks associated with China's financial system, especially the capital market, have been mitigated. In addition, other two factors are at play. Let me highlight them as follows: First, as shown by the underlying structure of share-A markets, their valuation is relatively low. The price earnings ratio of the SSE Composite Index is not more than 12 times and that of the SSE 50 Index is even lower, at less than 9 times. Compared with overseas markets horizontally, or with historical performance vertically, the price earnings ratio is low, which is attractive to investors. Moreover, with adequate liquidity, share-A markets are facing relatively low risks. Second, as for the macro environment facing share-A markets, China's epidemic prevention and control is at a different stage from those of the rest of the world, with the impact of the virus on share-A markets gradually overcome and companies trying to restart as early as possible. You may also notice a figure I have released just now. A quick survey we conducted in early March found that more than 98% of over 2,700 listed companies resumed operations in early March. In our survey sample, SMEs, which may also concern you, are faring well, with 80% of workers back to their jobs. These data are encouraging with some positive signals. Overall, economic recovery or even quick recovery has found a ground in China, despite the impact from severe volatility in overseas markets, which is controllable, limited and temporary. As for foreign capital flows, the data available shows limited outflows, and even some low inflows in the bond market. In the stock market, you may also have noted that outflows for the past month were huge and concentrated. But in the year to date, foreign capital outflows from share-A markets have reached RMB 20 billion or more. As foreign capital inflows in share-A markets were huge and concentrated in 2019, the data for the most recent month was low in comparison. Actually, the net outflows were modest. The ratio of foreign capital to traded market value in share-A markets is less than 4%, and its share in transactions is also limited. Therefore, foreign capital flows do have an impact on share-A markets, but no disruptive or radical shock. Thank you. Zhou Liang: Vice Chairman Li Chao has just said that China's stock market is dominated by domestic investors while foreign investors account for a small share. In China's current financing structure, direct financing is low while indirect financing is dominant. Next, the CBIRC will deepen the supply-side financial structural reform to support the expansion of direct financing. As you know, the development of the capital market is dependent on two factors: one is stable source of funds in the long term and the other is myriad healthy institutional investors. Insurance companies have become the second largest long-term institutional investors in China's capital market. Currently, RMB 18.8 trillion in insurance funds have been invested, including RMB 2 trillion invested in stocks and funds, which accounts for 10.8% of insurance fund investment. Although global financial markets have been fluctuating sharply these days, China's stock market has stayed generally stable. In addition to China's economic fundamentals, this should be attributed to the great efforts the CSRC has made. Next, the CBIRC will strongly support insurance companies to make investments, especially robust, long-term value investments in compliance with laws and regulations and market rules. We will also deepen the market reform regarding insurance fund investment and grant more autonomy to insurance companies under prudential regulation. For those with a high solvency adequacy ratio and well-matched assets and liabilities, we will allow them to moderately increase the share of equity investment if equity investment they have made reaches the upper limit of 30%. This surely would be based on rigorous risk control. Further, we will encourage more WM subsidiaries to be established, build and refine the third pillar for pension security, and support direct financing to do our bit to boost the stable and healthy development of China's capital market over the long term. Market News International: I have two questions. First, 6 central banks across the world have recently committed to providing more dollar liquidity through the long-term dollar liquidity swap lines. Will China's central bank participate in this action or similar global cooperation and coordination efforts? My second question is for the CBIRC and is about financial support for epidemic control and resumption of work. How should financial institutions support core players along the industry chain to provide liquidity to downstream players? Thank you. Chen Yulu: Thank you. China and the rest of the world live in a community of shared future for mankind, as emphasized by President Xi Jinping many times. Along with the global spread of the virus, global financial markets have become more volatile, sending stock markets in Europe, the US and many emerging market economies tumbling. The pandemic has dealt a big blow to the world economy and finance. But both the pandemic and its impact on the global economy are the common challenges facing the world. Although the virus has not been totally contained in China, we have overcome various difficulties to offer due help to the international community. Given that the pandemic is rapidly spreading in depth and width, countries across the globe need to enhance global coordination in macro policies such as public health policy, trade policy, fiscal and monetary policy to strengthen coordination and effectiveness of global response. As for whether the PBC has participated in global policy coordination, over which you are concerned, I'd say the PBC has been coordinating policies with international organizations and major central banks through multilateral, regional and bilateral channels, since the outbreak of the coronavirus. Governor Yi Gang has communicated with Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), Mr. Agustín Carstens, General Manager of the Bank of International Settlements (BIS), and Mr. Jerome Powell, Chairman of the Federal Reserve System (FED) many times to exchange their ideas on how to effectively respond to the coronavirus outbreak through monetary and financial policies. The PBC also has reported the impact of the pandemic and China's effective response to the central banks of G20 economies and major international financial institutions. Our communication, reports and exchanges have been responded positively from the international community. We have noticed that as the pandemic rages across the world, many countries have adopted similar policy measures to respond and safeguard their financial market stability. As a major global platform for the coordination of macroeconomic policies, G20 played a historic role in coordinating and boosting global economic recovery in the wake of the 2008 financial crisis. IMF, the core of the global financial security network, shoulders the responsibility for safeguarding the global financial market stability. We support international multilateral platforms and institutions like G20 and the IMF to continue to play a positive role in policy coordination and crisis aid, so as to effectively prevent and control the pandemic and ensure global economic and financial stability. Thank you. Zhou Liang: As you know, more and more companies along industry chains have restarted for business. Some players have seen dramatic changes in industry distribution since manufacturing industrialization, especially in the post-industrial era. Any single company could hardly produce a whole product alone now. The reporter mentioned industry chain, and I think it is the core to resumption of work. A core company tends to be at the center of an industry chain, surrounded by many SMEs upstream and downstream, especially micro and small businesses. We have done plenty of study on this recently. For example, there is an automotive group with more than 500 upstream and downstream partners. Then we guide a bank to provide services to the group given that the whole industry chain has products, markets and technologies, the core player is run normally and upstream and downstream players pay on time. So the bank extends more than RMB 70 billion in credit to the company, which boosts it to reopen soon. What will the company do afterwards? It will pay private, micro and small businesses upstream and downstream through prepayment. At that moment, the core company is in a leading position. But we also need to prevent it from taking this opportunity to corrode the interests of the micro and small businesses upstream and downstream. So we tighten regulation to ensure its prepayments will not do so. In addition, we support the company to conduct financing by pledging receivables, warehouse receipts and inventories. On the other hand, the bank expands technology applications based on the big data-enabled risk control system and offers financing services for the micro and small businesses upstream and downstream using the big data and blockchain technologies. The reporter may be more concerned about the support from the banking and insurance industries, while industry chain financing is just a case for resumption of work. What I want to say is that the CBIRC has introduced a series of policies for the financial system to support the growth of the real economy. These policies include: first, supporting companies that are key to epidemic prevention and control to resume work and expand capacity. Second, flexibly adjusting arrangements for individuals who have difficulty in paying consumer loans including credit card, auto loan and mortgage loan to pay these loans. Third, helping eligible companies who are temporarily running short of money to get through by making temporary arrangements for deferred payment of principal and interest. Fourth, stepping up credit support for private, micro and small businesses, especially by lowering their financing costs. Fifth, developing SC finance to relieve micro and small businesses downstream and upstream of liquidity pressure. Sixth, precisely supporting key projects and engineering that drive macroeconomic and regional development in accordance with national strategies. Banks have provided credit support of more than RMB 1.8 trillion for epidemic control. Since January 25, around 20% micro, small and medium companies have been allowed deferred payment for principal and interest of overdue loans. In January and February, an additional loan of RMB 250 billion was issued to the manufacturing industry, significantly higher than that of the same period of the previous year. Banks and insurance institutions have performed their social responsibilities by donating supplies worth RMB 2.7 billion to the front lines of the battle against the virus. As the epidemic spreads globally, selected Chinese banks and insurance companies have offered aid to more than 20 affected countries and regions. For example, the Bank of China purchased 2.25 million pieces of medical supplies including face masks, gloves and protective gowns and sent them to over 10 countries and regions. The China Construction Bank and the Industrial and Commercial Bank of China have followed suit. Zhou Liang: Under the leadership of the CPC Central Committee with Comrade Xi Jinping at its core, positive progress has been achieved in epidemic prevention and control in China, and resumption of work has been pressed ahead with step by step. Since the outbreak, we have gone all out to ensure the continuity of financial services. Employees have been with us working on the front line and Party members have acted as role models. Except Hubei, banking outlets across the country report a work resumption rate of 95% and insurance outlets, more than 97%. Online and offline financial services have remained robust and flexible. A recent sample survey found that corporate account activeness has surged, fund flows and turnovers have been dramatically accelerated. For example, account activeness of sampled micro and small businesses for early March rose by 29 percentage points from that of late February, showing that the economy is becoming active again. Next, the CBIRC will follow the unified arrangements of the CPC Central Committee and the State Council to provide financial support for epidemic prevention and control and to improve the quality and efficiency of financial services for the growth of the real economy. We will enhance services for micro, small and private businesses, especially the private manufacturing industry, by increasing volume, reducing prices, enhancing quality and expanding coverage. As building a moderately prosperous society in all respects is one of our nation's top priorities for this year, we have increased financial support for poverty alleviation and will ensure implementation in a problem, target and demand-oriented approach. Notwithstanding our efforts, we will still need to overcome our weaknesses and some companies will continue to find access to financing hard and costly. We will do whatever it takes to improve our quality and efficiency to address concerns of companies and our people. Thank you. China Business News: I have learned that the PBC and the SAFE have adjusted the macro-prudential regulation parameter for full-scale cross-border financing. To what extent will this measure support companies? Will it cause external debt risk? Thank you. Xuan Changneng: Thank you. In 2016, the PBC and the SAFE established a macro-prudential management framework for full-scale cross-border financing and eliminated the ex-ante approval for external debt, which have strongly facilitated cross-border financing by domestic institutions. This policy adjustment mainly concerns the upgrading of the macro-prudential regulation parameter for full-scale cross-border financing from 1 to 1.25, which will expand the leeway for securing external funding and reduce financing costs for physical entities. By initial estimates, this adjustment will allow firms to access tens of billions of USD in external funding. Currently SMEs secure external funding through overseas banks and overseas affiliates at a cost that varies with corporate finances, operations and outlooks. With the upper limit of risk-weighted cross-border financing raised from 2 times to 2.5 times net assets and the room for external financing expanded by 25%, this adjustment is expected to enable firms to secure tens of billions of USD in external funding. By supporting domestic institutions especially SMEs and private firms to leverage global and domestic resources and markets to raise funds through diverse channels, this adjustment will help alleviate the difficulty and the high costs to access financing, and enable firms to restart. In particular, as policy rates in overseas markets are generally low now, this adjustment will give Chinese enterprises greater room to secure financing overseas. But this adjustment will not lead to surges in external debt. China's external debt is reasonable in both size and structure, with overall risk associated with external debt under control. Firms' debts to overseas banks and their affiliates are modest in size, occupying a limited share in total external debt. Therefore, this adjustment will not cause our external debt to soar while facilitating cross-border financing by domestic institutions. Worth noting is that this adjustment is not applicable to local government's financing platforms and real estate developers, who, therefore, should not borrow money overseas based on this policy. CNBC: What considerations and measures other than communication will help stabilize global financial markets if Chinese financial institutions are going to go global? Chen Yulu: As the pandemic rages across the globe, global financial markets have become increasingly volatile these days. Indeed, the stock markets of Europe, the US and many emerging market economies have tumbled by a median of around 30%, which has caused great concern in the international community. But it is premature to say a global financial crisis is haunting the world economy. A global financial crisis is usually characterized by the following: first, global financial markets are plummeting due to cross-market and persistent panic. Second, legions of financial institutions, particularly those of systematic significance, go bankruptcy. Third, the global real economies are performing poorly. To respond to the heightened volatility of global financial markets, many countries have introduced some measures, whose impacts need to be watched. As Mr. Li has said, in theory, volatility in global financial markets may impact China's financial markets through three channels. First, pessimism in overseas markets spreads to China. Second, global capital flows into China. Third, deteriorated balance sheets of multinationals and foreign financial institutions may also be felt in China. But in practice, China's financial markets have stood the test and remained stable with tiny fluctuations as global financial markets are in volatility. China's financial markets are performing stably and market expectations stay steady now, allowing adequate macroeconomic policy space and sufficient instruments. This is because: first, major risks have been forestalled and defused, the supply-side financial structural reform has been boosted and the financial sector has been opened wider, making China's financial system more robust. Second, China's financial markets, after reopened as scheduled, have performed steadily, and so has their infrastructure, shoring up investor confidence. Third, since the outbreak, China has stressed moderate flexibility in its monetary policy for early response and quick action, and financial regulatory policy has been put in place quickly, offering strong and precise support to the real economy, especially hard-hit regions, micro, small and medium businesses and private firms, thus stabilizing the economy. Next, under the direction of the Financial Stability and Development Committee under the State Council, we will work to ensure the success of two tasks amid volatile global financial markets. First, we will be dedicated to our own business under the existing guidelines and policy frameworks. Over 70 years of rapid development, China has become a financial giant boasting the world's largest credit market, highest foreign exchange reserves, and second largest stock, bonds and insurance markets. Therefore, ensuring China's financial market stability is a great contribution to global financial stability. Second, we will participate in international coordination of macroeconomic policies. We will intensify monitoring of the performance of global financial markets, deeply analyze, study and identify the underlying laws of this round of volatility in global financial markets, and draw on China's experience in introducing epidemic response policies to offer constructive ideas on global coordination of economic policies. At the same time, we will participate in offering multilateral global aid to developing countries that are reeling from the pandemic, so as to jointly safeguard the stability of global financial markets. Thank you. CRI of China Media Group: The CSRC has introduced many initiatives on deepening the capital market reform and opening up wider since last year. I wonder whether your work, especially the STAR market reform, will slow down amid the outbreak and global spread of the coronavirus? Thank you. Li Chao: Thank you for your question. Overall, the reform and opening up of China's capital market will not be derailed by the virus. In fact, China's capital market came into being as a product of reform and opening up, and boasts a history of 30 years. Over these three decades, as we have observed, China's capital market became more stable and played a better role as reform and opening up was intensified with positive impacts; but it came across difficulties when reform and opening up was sluggish. Therefore, it is clear that the reform and opening up of the capital market has its underlying reasons and drivers. We need to get the best out of the capital market, but as we are still grappling with weaknesses and deficiencies, we will continue to step up reform and opening up. As for the STAR market reform that concerns you, we have conducted research and validation for a while, including soliciting ideas in some areas. This reform will be focused on the registration-based IPO system, complete with basic systems such as issuance, listing, information disclosure, transaction and delisting. Related work is being pushed ahead. Moreover, we will follow the 12 priorities of this reform, including advancing the registration system reform, enhancing quality of listed companies, improving and strengthening service quality of intermediary institutions, protecting investors' interests, and creating a more favorable environment for middle and long-term capital investment, so as to further intensify the reform and build a regulated, transparent, open, vibrant and resilient capital market. For opening up, focus will be on market opening and access. To support market opening, we are putting in place relevant systems and rules and will continue to expand the scope and categories of investable products. For market access, we reviewed several foreign-controlled securities companies in 2019. We also announced a few days ago that wholly foreign-owned securities and funds companies can apply for reviews of sole foreign ownership starting from April 1. Overall, we are determined about the direction of opening up that has already been defined. Thank you. Reuters: The Fed has slashed interest rate to zero and restarted QE recently. Will China's central bank take bigger steps to ease monetary policy? Is there further room for interest reduction and required reserve ratio (RRR) cuts? How would you guard against imported financial risks? Thank you. Chen Yulu: Thank you. We all know that as the pandemic rages, countries are introducing measures to increase liquidity and reduce financing costs for the real economy, such as slashing interest rates. But some are also increasing their interest rates to keep their currency value stable. In China, we have been dedicated to epidemic prevention and control and supporting resumption of work since the outbreak, based on our situation and existing policy frameworks. Under the overall framework for monetary policy, key policies have been implemented as follows: first, the RMB 300 billion targeted re-lending has benefitted more than 5,000 companies critical to epidemic prevention and control, and over RMB 200 billion loans with discounted interest rates have been issued, with companies' financing cost only at 1.27% or so. An extra RMB 500 billion re-lending and re-discounting limit has been extended to support the resumption of work at micro, small and medium firms. A total of more than RMB 130 billion loans with discounted interest rates have been issued, and the interest rates have been much lower than 4.55%. Second, we have guided down market interest rates and the real loan rates are falling markedly. In February, conventional loan rate was 5.49%, down by 0.61 percentage points from the level before the loan prime rate (LPR) reform. Supported by these policies, China's real economy has been improving marginally. Based on the changes in payment and settlement data since the beginning of March, including loan and deposit data, the real economy has remained sound. It is estimated that the economic indicators will improve significantly in the second quarter, and China's economy will soon recover to a level close to its potential output. As for the orientation of our future monetary policies, we will focus on the following: first, we will ensure the intensity, cadence and focus of monetary policies in phases so that liquidity could be adequate and remain at a reasonable level. In particular, we must ensure the growth of M2 and aggregate financing to the real economy are matched with or even slightly higher than nominal GDP growth. As you may have noticed, M2 for February grew by 8.8% year-on-year, and existing aggregate financing to the real economy rose by 10.7% year-on-year. These two indicators have signaled that orientation of China's monetary policy. Second, we will make good use of the unique roles of structural monetary policies. For either the policy for RMB 300 billion targeted re-lending or the policy for extra RMB 500 billion re-lending and re-discounting limit, we need to guide financial institutions to offer stronger credit support to core enterprises on industry chains and micro, small and medium businesses and private firms downstream and upstream. In structural monetary policies, there will also be targeted RRR cuts policy, and extra targeted RRR cuts policy for joint-stock banks. To incentivize and guide these institutions, these policies must be well implemented. Third, we will make the best of policy finance. We will fully leverage the RMB 350 billion targeted credit limit from policy banks to provide strong credit support for the resumption of work at micro, small and private firms, the key areas for preparing for spring ploughing, pig farming and foreign trade especially production of products in international supply chains at preferential interest rates. Fourth, we will strengthen support for small and medium banks to increase capital and issue financial bonds, so that commercial banks' desire and capability to extend credit could be further improved. Last but not least, we will continue with the LPR reform to drive down real loan rates. We will guide the banking system to make room for the real economy and ensure a win-win situation of "stable economy" and "stable finance". Thank you. China News Service: While global markets have been in volatility recently, China's economy is also under heavier downward pressure. What would this impact China's banking and insurance industries? What would the CBIRC respond? Thank you. Zhou Liang: Thank you for your questions. Given the volatility in global financial markets and the downward pressure on China's economy, we believe China's banking and insurance industries will be impacted, but not heavily. First, China's banking and insurance industries are performing very stably now, with no signs of heavy risk exposure. Second, as the virus abates in China, the banking and insurance industries will continue its momentum of healthy and stable growth. As you know, guarding against financial risk is the permanent topic in the financial world. Since the National Financial Work Conference, the CBIRC has made preventing and addressing financial risk its top priority, which has produced positive results. Data shows that China's macro leverage is generally stable, and diversified financial risk has contracted. Over the past three years, in the banking sector, RMB 5.8 trillion in NPLs has been disposed of, risky businesses like shadow banking and cross financial business have shrunk by RMB 16 trillion and a batch of financial institutions violating laws and regulations have been punished. Risks associated with Internet lending, or P2P lending, have been markedly mitigated, and the number of P2P lending institutions has been cut by nearly 90% from the level of three years ago. A host of illegal funding cases have been identified and solved, and people concerned have been punished. The financial market order is changing for the better. In recent years, as the supply-side financial structural reform is deepened and the financial sector is opened up, governance in banking and insurance institutions has been further standardized. Getting back to basics or focusing on primary responsibilities or businesses has become a trend in the banking and insurance industries. The early-stage efforts to forestall and defuse financial risk and carry out the system and mechanism reform have laid a solid foundation for the robust growth and risk response of the banking and insurance industries. Facts and figures are more convincing. For example, latest data shows that new RMB loans hit RMB 4.2 trillion in January and February, representing an increase of RMB 130.8 billion year-on-year, which has provided a strong boost to epidemic prevention and control and economic growth. In February, with so many businesses shut down, everyone was concerned that micro, small and medium businesses and the real economy were impacted, but financial data shows that banks' NPL rate by the end of February rose by only 0.06 percentage points from that of the beginning of the year, and the rate reaches 2.08% now. At the same time, loan loss provisions at banks exceeded RMB 6 trillion, which means tremendous resources have been set aside to cope with future risks. Provision coverage hit 181%, meaning RMB 181 in loss reserves needs to be provided for NPL of RMB 100. Capital adequacy ratio of banks reached 14.6% and solvency adequacy ratio in the insurance industry was 247%. Overall, the banking and insurance industries boast strong risk resilience and adequate resources available. Next, the CBIRC will continue to forestall and defuse financial risks, and deepen the supply-side financial structural reform to boost the high-quality development of the banking and insurance industries. First, a multi-faceted approach will be adopted to intensify the disposal of NPLs, dispose of risky institutions properly, crack down on shadow banking and reduce risky businesses. Second, we will work to prevent consumers from hoarding housing to drive smooth and healthy development of the real estate market. We will also cooperate with local governments to properly reduce hidden local debts. Third, we will press ahead with the crackdown on P2P lending and step up the standardization of online insurance. Fourth, we will facilitate the improvement of corporate governance of banks and insurance institutions, especially the standardization of equity management, as some small and medium financial institutions witnessed a chaos in equity management recently, such as illegal interventions of major shareholders in corporate operations and control by insiders, or even embezzlement by some people. All these are what we will crack down on, and we will continue to steer banks and insurance institutions to get standardized and rigorously punish people who violate laws and regulations. Fifth, we will allow banks and insurance institutions to increase capital through multiple channels. Although banks' capital adequacy ratio is 14.6%, yet they still need to increase their capital to enhance their financial strength. Sixth, we will deepen the reforms of city commercial banks and rural credit cooperatives, research and develop the reform plan for financial asset managers, steer transformation of bank WM units and the trust industry, and build and refine the third pivot of pension security. Seventh, we will expand reform and opening up and accelerate the implementation of the financial opening measures. Eighth, we will uphold Party leadership and step up Party building to intensify anti-corruption in the financial system. Corruptions are widely seen in the financial sector, and we have solved a batch of corrupt cases with profound learnings, or at a heavy price. The CBIRC will continue to maintain a tough stance on corruption and unswervingly implement the decisions and plans of the CPC Central Committee. The stable economy guarantees stable finance. As shown by the fundamentals, China will sustain sound economic growth over the long term and the advantages of socialism with Chinese characteristics have been justified by this pandemic. In the long run, China, which boasts a broad domestic market, diverse industries and high-quality talent, especially the large room for development in urbanization, will further unlock its potential and resilience for economic growth. Next, the real economy and finance will complement each other to form a virtuous cycle. Overall, the top priority is to do our own business well. We believe that under the leadership of the CPC Central Committee, we will be able to overcome risks and challenges arising in the course of development and ensure stable and healthy economic growth. Thank you. HK Economic Herald： What measures has the central bank taken to respond to increasing risk events in China's bond market? What are their impacts? What are the next steps? Thank you. Chen Yulu: The bond market is at the core of China's direct financing mechanism and its stability matters. But so far, the pandemic has not directly led to higher defaults in China's bond market. Nor has the external volatility of global financial markets resulted in sharp fluctuations in China's bond market. So the market stays generally stable. Since February, statistics show that defaults have stayed at a normal level, with the number of players that have defaulted for the first time far lower than that of the same period last year. Since the outbreak of the virus, the PBC has steered the National Association of Financial Market Institutional Investors to focus on three aspects of work, which have delivered significant impacts. First, quick services. We have helped the Association establish easy access for the registration and issuance of bonds. For hard-hit companies, in particular, quick services have been ensured in bond issuance, effectively addressing the possible continuity risk associated with capital flows. In February, a total of corporate bonds issued hit RMB 750 billion, more than doubling that of the same period last year. Second, offering facilitation. For the issuance of corporate bonds, the expiry dates for registration and filing have been extended, and fees for the registration, trading and custody of bonds have been deducted or waived. Third, risk prevention in advance. This means taking diverse steps to address potential default risk in advance. In line with market orientation and the rule of law, we have allowed rollovers and swaps of bonds for players in need to defuse default risk beforehand. Since February, bonds worth RMB 5.1 billion in the interbank market have been diversified. With these measures, the direct financing mechanism for China's bond market has played a key role at this particular moment, and the overall market has stayed stable. Next, we will continue to watch the operations of hard-hit industries such as traditional clothing, labor-intensive manufacturing, and transport, and core players on the industry chain, and refine the disposal mechanism for bond defaults to ensure bond market stability. We will also offer stronger support for epidemic prevention and control and resumption of work in direct financing. Thank you. Hu Kaihong: We are running out of time and will take one more question. Xinhua Daily: I have two questions. The first is whether the global spread of the virus will have a reversing impact on China's exchange rate. As we have noticed, the RMB exchange rate against the US dollar has been depreciated recently. Will this impact China's cross-border capital flows, such as cross-border capital outflows at scale? Thank you. Chen Yulu: The RMB exchange rate has concerned everybody. As you know, China's exchange rate system is a market-based and organized floating system that is regulated against a basket of currencies, with the market playing a decisive role. Recent years have seen ups and downs in the RMB exchange rate driven by the market, featuring two-way fluctuations. Due to the recent pandemic, global foreign exchange markets have fluctuated sharply, but the RMB exchange rate, despite some volatility, has remained in equilibrium and stayed generally stable. For example, the euro was devalued by 4.7% against the US dollar and the GBP, down by more than 12% against the US dollar. But in comparison, the RMB was down by just 1.8% against the US dollar. Overall, the CFETS RMB Index rose instead. In the future, the RMB exchange rate against the US dollar is expected to move around 7, with ups and downs and two-way fluctuations. China's foreign exchange market will stay stable. So will the expectations of the RMB exchange rate. In the long run, the RMB exchange rate will move depending on the stability of economic fundamentals. As epidemic prevention and control efforts are yielding positive changes and the work resumption rate keeps rising, the fundamentals that sustain sound economic growth over the long term will offer a strong support for the stability of the RMB exchange rate. Meanwhile, in the financial market, the spreads between domestic and foreign currencies remain in a reasonable range, and China's foreign exchange reserves are adequate and stable. All of these have significantly shored up the continued stability of the RMB exchange rate. Thank you. Xuan Changneng: I have a few words to add. Our recent observation shows that as the pandemic rages across the world, global financial markets are in heightened volatility, leading to higher risk aversion and rapid rise in the US Dollar Index, which surged by 6.8% in March 10-19. Despite greater external uncertainties, China's cross-border capital flows have grounds to remain generally stable in terms of the RMB exchange rate and the supply and demand in the foreign exchange market. Firstly, the rise in the US Dollar Index is the result of strained US dollar liquidity in global markets. It is a technical rise that is not driven by economic fundamentals. Along with the rapid spread of the virus across the globe, risk aversion in the market has increased and global markets have become more volatile, leaving market players eager to get returns, thus stretching the US dollar liquidity and technically driving up the US Dollar Index. As we all know, the US dollar takes a large share in global economic and financial activities in terms of pricing, settlements or transactions, and this is why the US Dollar Index has risen rapidly these days. Secondly, the RMB exchange rate remains relatively robust in global markets, which Mr. Deputy Governor has given a detailed explanation just now. In response to the quick rise in the US Dollar Index, other currencies have generally depreciated against the US dollar. From March 10 to 19, the euro and the GBP declined by 6.6% and 12.5% respectively against the US dollar, and the Emerging Market Currency Index went down by 3%, while the RMB exchange rate was devalued by a slight 2%. This shows that the RMB exchange rate against the US dollar has been passively brought down by the strengthening dollar, but at a margin lower than those of major global currencies such as the euro and the GBP, as well as emerging market currencies. Further, a basket of currencies show that the RMB exchange rate has risen by 2.7%. Thirdly, the supply and demand in China's foreign exchange market is in balance. In February, China posted a surplus of USD 14.2 billion in banks' settlements and sales of foreign exchange and a surplus of USD 9.6 billion in foreign-related receipts and payments in non-banking sectors. With other supply and demand factors considered, such as forward sales and settlements of foreign exchange and options, the supply and demand in China's foreign exchange market have found a basic equilibrium. Market players including firms and individuals, as we have found, settle foreign exchange when the exchange rate is high and purchase foreign exchange when the exchange rate is low. This is a reasonable trading model, which shows the exchange rate, a price factor, has played a positive role in regulating the supply and demand in the market. Since March, the supply and demand in China's foreign exchange market have remained in balance. The strained US dollar liquidity and the rising US Dollar Index will inevitably impact emerging market economies including China in the short run. So we need to tighten monitoring and respond proactively and properly. In the medium and long run, China's economic fundamentals, its currency and financial situations will strongly underpin the stability of China's cross-border capital flows and the RMB exchange rate will fluctuate in two ways within a reasonable range, with no ground for significant devaluation. For this, Mr. Deputy Governor has given many reasons and I want to stress them once again. First, as the epidemic prevention and control are yielding positive changes, the work resumption rate is rising, trade is recovering, and macroeconomic policy support is being stepped up, which have provided a strong boost to the growth of the real economy. Second, major economies' monetary policy rates have fallen in the zero or negative territory, while China's monetary policy rate remains in the normal territory, leading to high spreads between China and the rest of the world and increasing the RMB's value and attractiveness for global asset allocation. Here is a figure that can confirm this. The Fed has cut interest rates twice recently, resulting in expanded spreads between the US and China. From February 20 to March 19, the spread in 10-year treasury bond between China and the US reached a daily average of 1.72%, up by 40 basis points from January. Therefore, the level of spread can help maintain the attractiveness and value of RMB assets for asset allocation. Third, as the RMB exchange rate formation mechanism is improved, exchange rates have been more elastic and the regulation capabilities of the foreign exchange market and its maturity have been on the rise, enabling China to better guard against and respond to risks arising from cross-border capital flows. Therefore, we are confident that, as epidemic prevention and control and resumption of work progress under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China's economy will remain sound in the long term and the goal of forestalling and defusing major financial risks will surely be achieved as scheduled. Thank you. Hu Kaihong: This is the end of today's press conference. Thank you, speakers. Thank you, friends from the press. (The original text is available at www.pbc.gov.cn) 2020-03-22/en/2020/0416/1666.html
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为更好支持贸易新业态发展，促进外贸提质增效，扎实做好“六稳”工作，全面落实“六保”任务，日前，国家外汇管理局发布《国家外汇管理局关于支持贸易新业态发展的通知》（汇发〔2020〕11号，以下简称《通知》），便利相关外汇业务办理。 《通知》主要内容包括：一是拓宽贸易新业态结算渠道。支持符合条件的银行凭交易电子信息办理外汇业务。二是便利跨境电商出口业务资金结算。跨境电商可将境外仓储、物流、税收等费用与出口货款轧差结算。三是优化跨境电商相关税费的跨境代垫。企业可为客户跨境代垫相关的仓储、物流、税费等。四是满足个人对外贸易结算需求。个人可通过外汇账户办理跨境电商和市场采购贸易项下外汇结算。五是完善市场采购贸易资金结算。经市场采购贸易平台备案的主体，银行可凭平台信息为其办理委托第三方报关的收结汇业务。六是支持外贸综合服务企业代办出口收汇。符合技术条件的外贸综合服务企业，可通过具备审核交易电子信息能力的银行，为其服务的客户代办出口收汇手续。七是便利企业远程办理外汇业务。企业可与外汇局系统直连，实现更多外汇业务网上办理。八是优化小额交易涉外收付款申报。支持企业以自身名义汇总申报小额涉外收支，满足其出口退税、融资的申报需求。九是持续跟踪贸易新业态的创新发展。按照“服务实体、便利开放、交易留痕、风险可控”的原则，主动回应市场主体外汇业务的新诉求。此外，外汇局将加强事中事后监管，并指导银行和支付机构完善内控，强化风险防范。 《通知》自发布之日起实施。（完） 2020-05-20/beijing/2020/0520/1242.html
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日前，国家外汇管理局发布《国家外汇管理局关于支持贸易新业态发展的通知》（汇发〔2020〕11号，以下简称《通知》）。国家外汇管理局新闻发言人、总经济师王春英就相关问题回答了记者提问。 一、《通知》出台的政策背景是什么？ 答：党中央、国务院先后出台多项扶持政策，要求支持跨境电商、市场采购贸易、外贸综合服务等贸易新业态发展。当前，促进贸易新业态发展已成为我国加快培育贸易竞争新优势、推动贸易高质量发展的重要内容。但与传统贸易相比，贸易新业态多元的市场主体、高频的线上交易模式，对高效便捷的金融服务有着更大的诉求。为更好支持贸易新业态发展，扎实做好“六稳”工作，全面落实“六保”任务，外汇局在广泛听取贸易新业态市场主体意见和总结前期试点经验的基础上发布《通知》，优化贸易新业态外汇政策，提升相关贸易外汇收支便利化水平，以进一步激发市场活力，促进贸易新业态的健康快速发展。 二、《通知》的总体思路是什么？ 答：《通知》聚焦解决贸易新业态“小额、高频、电子化”交易中结算不便捷问题。政策设计上，遵循“鼓励创新、包容审慎”原则，积极适应贸易新业态发展的实际需要。按照“服务实体、便利开放、交易留痕、风险可控”要求，放宽贸易新业态外汇政策，优化外汇服务，便利相关外汇业务办理，实施“交易越合规、汇兑越便利”的信用约束和分类管理。 三、《通知》将为市场主体带来哪些政策便利？ 答：《通知》优化了贸易新业态外汇结算模式，扩大账户收支范围，推动更多业务网上办理，在降低市场主体综合成本的同时，提升跨境结算效率。具体可以从两方面来看： 放宽外汇管理方面。一是便利跨境电商出口业务资金结算。跨境电商可将境外仓储、物流、税收等费用与出口货款轧差结算。二是优化跨境电商相关税费的跨境代垫。企业可为客户跨境代垫相关的仓储、物流、税费等。三是满足个人对外贸易结算需求。个人可通过外汇账户办理跨境电商和市场采购贸易项下外汇结算。四是完善市场采购贸易资金结算。经市场采购贸易平台备案的主体，银行可凭平台信息为其办理委托第三方报关的收结汇业务。五是支持外贸综合服务企业代办出口收汇。符合技术条件的外贸综合服务企业，可通过具备审核交易电子信息能力的银行，为其服务的客户代办出口收汇手续。 提升外汇服务方面。一是拓宽贸易新业态结算渠道，支持符合条件的银行凭交易电子信息办理外汇业务。二是便利企业远程办理外汇业务。企业可与外汇局系统直连，实现贸易业务报告、国际收支申报等更多外汇业务网上办理。三是优化小额交易涉外收付款申报。支持企业以自身名义汇总申报小额涉外收支，满足其出口退税、融资的申报需求。四是持续跟踪贸易新业态的创新发展，主动回应市场主体外汇业务的新诉求。 四、下一步，外汇局在支持外贸发展方面还有哪些考虑？ 答：外汇局将继续按照党中央、国务院决策部署，扎实做好“六稳”工作，全面落实“六保”任务，进一步深化外汇领域改革开放，推出更多外汇便利化业务，持续助力企业复工复产，更好满足贸易创新发展诉求，推进贸易高质量发展，服务国家全面开放新格局。 2020-05-20/beijing/2020/0520/1243.html
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On December 5, 2019, Pan Gongsheng, Administrator of the State Administration of Foreign Exchange (SAFE), met with a delegation led by Stanley Fischer, former FED Vice Chairman. Mr. Pan also invited Prof. Fischer to give a lecture at the SAFE on topics covering global macroeconomic conditions, international trade, and monetary policy. 2019-12-06/en/2019/1210/1605.html
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2020年4月银行结售汇数据（分地区） 2020-05-22/zhejiang/2020/0522/1183.html
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问：境外机构投资者投资银行间债券市场产生的外汇风险敞口是指什么？ 答：外汇风险敞口（也称汇率风险敞口）是指境外机构投资者以境外汇入资金在银行间债券市场因投资人民币债券而承受人民币汇率波动风险的头寸，包括债券投资的本金、利息以及市值变化。外汇风险敞口是境外机构投资者在境内外汇市场建立外汇衍生品敞口的基础。 2020-05-22/ningbo/2020/0522/1360.html
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According to the statisticsof the State Administration of Foreign Exchange (SAFE), the Chinese foreignexchange market (excluding foreign currency pairs, the same below) recorded totaltransactions of RMB 16.27 trillion (equivalent to USD 2.30 trillion) in April 2020. Specifically,the transactions volume of the bank to customer market was RMB 2.48 trillion (equivalent toUSD 351.5 billion), the transactionsvolume of interbank market was RMB 13.79 trillion (equivalent to USD 1.95 trillion), the cumulativetransactions volume of the spot market was RMB 5.77 trillion (equivalent to USD 816.7 billion), and that ofthe derivatives market was RMB 10.50 trillion (equivalent to USD 1.49 trillion). From January to April 2020, a total of RMB 59.29 trillion (equivalent to USD 8.47 trillion) was traded in the Chinese foreignexchange market. 2020-05-22/en/2020/0522/1687.html
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国家外汇管理局统计数据显示，2020年4月，中国外汇市场（不含外币对市场，下同）总计成交16.27万亿元人民币（等值2.30万亿美元）。其中，银行对客户市场成交2.48万亿元人民币（等值3515亿美元），银行间市场成交13.79万亿元人民币（等值1.95万亿美元）；即期市场累计成交5.77万亿元人民币（等值8167亿美元），衍生品市场累计成交10.50万亿元人民币（等值1.49万亿美元）。 2020年1-4月，中国外汇市场累计成交59.29万亿元人民币（等值8.47万亿美元）。 2020-05-22/safe/2020/0522/16276.html