Financial authorities crack economic hard nuts with targeted tools

China's financial authorities on Friday reiterated their resolve to keep the world's second-largest economy on track by implementing and rolling out more policies aimed at addressing outstanding challenges.

Head of the country's central bank, along with the leaders of China's top securities watchdog and top financial regulator gathered once again in less than a month following their joint participation in a high-profile late-September press conference that unveiled an expectation-beating raft of pro-growth policies.

"There are still prominent contradictions and challenges in the current economic operation, mainly in the real estate sector and capital market," Pan Gongsheng, governor of the People's Bank of China, said in his address at the Annual Conference of Financial Street Forum 2024.

The country's major cities continued to see a price decline of commercial residential homes in September, along with improved expectations for the property sector, official data showed Friday.

"Based on international experience and China's past practices, targeted policies need to be introduced to address these issues," Pan said.

In the past month, the country has cut the reserve requirement ratio, reduced the interest rates for existing mortgage loans and introduced a swap facility to channel more cash into the stock market, among others.

The roll-out of incremental policies indicates Chinese authorities' "firm determination to ensure economic stability, stabilize expectations, promote consumption, and improve people's well-being," Pan said.

In order to ensure housing delivery and stabilize the real estate market, the country has accelerated the expansion and improvement of the urban real estate financing coordination mechanism, so that all eligible projects can secure financing in a timely manner, said Li Yunze, head of the National Financial Regulatory Administration.

As of Oct. 16, loans approved for real estate projects eligible for financing support via a white list program had reached 2.23 trillion yuan (about 313.1 billion U.S. dollars), and by the end of this year, the approved loan amount for the white-list projects is expected to top 4 trillion yuan.

In a financial system where indirect financing predominates, it is crucial to enhance the role of banks as the main force in offering financing support, Li said, indicating that more efforts will be made to make banks find market demands, incentivized to lend, and dare to make lending decisions with an improved accountability mechanism.

In his speech, Wu Qing, head of the China Securities Regulatory Commission, underscored the capital market's role in fostering innovative capital, facilitating industrial transformation and upgrading, improving social wealth management, and stabilizing social expectations.

The commission will facilitate the entry of medium and long-term funds into the capital market, guide and supervise listed companies to improve corporate governance, and further support the development and growth of new quality productive forces, according to Wu.

Chinese stocks closed higher on Friday, with the benchmark Shanghai Composite Index up 2.91 percent to 3,261.56 points, which climbed over 18 percent compared with the closing figure on Sept. 23, the day before Chinese financial authorities announced the confidence-boosting policy package.

The three government organs held a seminar on Wednesday with the country's major financial institutions, urging them to act fast and earnestly in implementing related policies.

To facilitate cross-department coordination and collaboration, a dedicated work mechanism will be set up in a bid to generate synergies and maximize the effectiveness of policies, the seminar noted.

Friday's data showed that the Chinese economy expanded 4.6 percent year on year in the third quarter and 4.8 percent year on year in the first three quarters of this year.

China aims to expand its GDP by around 5 percent year on year this year, a goal that Chinese authorities have recently called for concrete moves to achieve.