The State Council said China must balance the need for stable growth while managing risks and maintain a prudent and neutral monetary policy, Reuters reports, citing a statement from the country’s cabinet following a meeting of top economic and financial policymakers.
Data released on Friday showed the world’s second largest economy growing at its weakest pace since the global financial crisis, underscoring challenges for Beijing amid an escalating trade war with the United States and sluggish domestic demand.
The State Council Financial Stability and Development Commission held a special meeting on Saturday led by Vice Premier Liu He to discuss fending off financial risks, according to the statement.
Senior officials in the commission said China must properly balance needs for growth, de-leveraging and strengthening supervision, the statement said.
China has been gradually easing monetary and fiscal policy in recent months to support growth. The central bank earlier in October announced its fourth reserve requirement ratio cut of 2018 to cut funding costs, while the government has signaled it would increase infrastructure spending.
Regulators have emphasized in recent months the need to ensure proper funding support for smaller companies.
Sunday’s statement on the state council commission’s meeting said China will focus on resolving financing difficulties of smaller firms and the private sector, adding that loans to promising companies facing short-term difficulties should not be blindly cut off.
It also said the government will encourage qualified private entities to set up funds that would support the private economy without elaborating further.
In Brussels, Premier Li Keqiang said at a meeting between Asian and European leaders that China will continue to open up its economy, push forward reforms and improve its business environment, the official Xinhua News Agency reported on Saturday.
Li said Asian and European countries need to safeguard multilateralism and the rules-based free trade system, the report said.
Li said that China’s economy is healthy but is facing challenges including changes to the external environment.
He said China will continue to move toward a market-oriented exchange rate, will not engage in competitive devaluation, and that the yuan can remain basically stable at a reasonable level.
The Chinese premier said he supports improvements to the rules of the World Trade Organization (WTO), but that changes must be carried out on the basis of the WTO’s existing rules and the interests of developing countries must be respected, Xinhua reported.
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