Bloomberg (September 5) reported Yang Yinkai, Deputy Secretary General at the National
Development and Reform Commission (NDRC), as telling journalists on September 4
that China will accelerate its stimulus rollout in the third quarter as it tries to recover from a
second quarter marred by pandemic-related losses. He said it’s “crucially important” for the
country to adopt supportive policies this quarter. He was speaking alongside officials from the
central bank and other government ministries. He and the other officials noted that 300 billion
yuan ($43.6 billion) in funds have been distributed through a policy bank financing program,
which is intended to spur infrastructure investment this year. They said local governments have
also sold 3.5 trillion yuan worth of special bonds through August, including almost all of the
bond quota allocated for construction projects. At the same briefing, central bank Deputy
Governor Liu Guoqiang addressed the currency’s weakness, saying authorities will be able to
keep the yuan stable. Shortly after his comments, the PBOC cut the foreign-currency reserve ratio by 2 percentage points, a move aimed at boosting the yuan. Liu Guoqiang
said, “Movements that are reasonable, equilibrium and basically stable is what we’d like to see,”
and that such a trend would “not be allowed to change.” He added that the “spill-over impact
of US monetary policy is controllable” due to the resilience of the Chinese economy and the
rising flexibility of the yuan’s exchange rate.
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