The Monetary Policy Committee of the PBC held the 4^thQuarterly Meeting of 2003 in Beijing recently.

 

It was agreed in the meeting that, despite variousdifficulties, the Chinese economy had maintained sustained rapid growthmomentum this year. The PBC carried out sound monetary policy and adoptedeconomic measures to address the excessive growth of money and credit. Atend-November, balance of broad money (M2) reached RMB21.6 trillion yuan,representing a year-on-year increase of 20.4 percent, and new loans of allfinancial institutions registered RMB2.87 trillion yuan, an acceleration ofRMB1.23 trillion yuan on year-on-year basis. The trend of faster than desiredincrease of money and credit had been preliminarily reined in, and theperformance of financial industry remained stable.

 

The Committee had in-depth review of thecurrent economic and financial development and price movement both at home andabroad. It was agreed that the continuity and stability of the macro-economicpolicies should be maintained to strengthen the scientific, forward-looking andefficient approach to macro-economic management.

 

The Committee discussed monetary policy and measuresto be adopted in the period ahead and concurred that the sound monetary policyshould be preserved, interest rates of deposits and loans be maintained stableto ensure steady advancement of market-based interest rate reform. Theformation mechanism of RMB exchange rate should be further improved to keep RMBexchange rate basically stable at an adaptive equilibrium level and promote theequilibrium of the balance of payments.

 

It was stressed at the meeting that the creditstructure should be further adjusted to prevent credit flow to low-efficientand duplicated construction projects, and that coordinated development of themoney market, capital market and insurance market should be push forward. Themeeting also encouraged commercial banks to strengthen credit support to agriculture,small and medium-sized enterprises, consumption and employment.

 

The meeting was chaired by Mr. ZhouXiaochuan, Governor of the PBC and Chairman of the Monetary Policy Committee,and joined by other Committee members including Mr. You Quan, Mr. Li Yong, Mr.Li Ruogu, Mr. Li Deshui, Mr. Guo Shuqing, Mr. Liu Mingkang, Mr. Shang Fulin,Mr. Wu Dingfu, Mr. Xiao Gang and Mr. Li Yang. Mr. Zhu Zhixin provided writtencomments. Presidents of the PBC branches in Shenyang, Tianjin and Nanjing alsoattended the meeting.