In his important speech at the sixth meeting of the Standing Committee of the 14th National People’s Congress, Governor of the People’s Bank of China Pan Gongsheng (潘功胜) presented a comprehensive “Report on the Financial Work of the State Council” on October 21, 2023. The report outlined a series of key points and strategic measures to maintain financial stability, promote economic recovery and prevent risks in the Chinese financial sector. Cryptocurrencies were also included in the report. Here are the details…
Cryptocurrency statement came from China
The most striking aspect of this report is the strong stance taken against cryptocurrency speculation in China. Governor Pan Gongsheng made it clear that the Chinese government is determined to firmly stop the speculation of cryptocurrency transactions in the country. This announcement is in line with China’s long-standing stance on cryptocurrencies, where authorities have previously banned Initial Coin Offerings (ICOs), shut down cryptocurrency exchanges, and warned against crypto trading.
The Governor also emphasized that illegal fund raising and money laundering activities must be seriously prevented. The Chinese government is wary of illegal financial activities. The renewed focus on combating such practices underscores their commitment to maintaining a clean and safe financial ecosystem. Chairman Pan Gongsheng outlined six key points in the report to maintain stability while promoting economic progress:
- Prudent Monetary Policy: China will continue to implement a prudent monetary policy, focusing on fine-grained control to ensure that broad money supply growth is in line with nominal economic growth rates.
- Strengthened Financial Control: The government is actively working to develop modern financial supervision, increase the ability of finance to serve the real economy, and promote the stable functioning of financial markets.
- Financial Reform and Opening Up: The report underlines the importance of deepening financial reform and expanding access of financial markets to international players.
- Preventing Financial Risks: The Chinese government is committed to preventing and resolving financial risks, especially in small and medium-sized financial institutions. Measures to address problematic assets and reduce risks continue.
- Support to the Real Economy: Financial institutions are encouraged to provide ample financing to support key sectors, including manufacturing and technology-based small and medium-sized businesses, to facilitate economic growth.
- Legal Framework and Anti-Corruption: The report places significant emphasis on the rule of financial law and commits to severely punishing financial fraud. The regulatory framework will be improved to ensure appropriate oversight.
Gongsheng covers financial markets
Besides cryptocurrencies, the report also highlights the importance of guiding and stabilizing financial market behavior and expectations. The central bank will take timely measures to prevent risk contamination in stock markets, Bitcoin and altcoin space, bond markets and foreign exchange markets. While doing all this, it will maintain the stable functioning of the financial market. This comprehensive report highlights the Chinese government’s determination to maintain financial stability, prevent risks and advance economic growth. It is clear that the new central bank governor, Pan Gongsheng, intends to address the evolving financial environment and is determined to implement policies to ensure that China’s financial system remains safe and reliable.
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