People’s Bank of China Governor Zhou Xiaochuan spoke at a news conference in Beijing on Saturday.
Also there were deputy governors Yi Gang, Fan Yifei & Pan Gongsheng (Head of SAFE - the State Administration of Foreign Exchange).
Highlight headlines from Zhou:
- China can reach the government's newly set growth target (6.5 to 7%) without excessively loosening credit and that the PBOC will continue to maintain a "prudent" monetary policy
- On the yuan, Zhou said its returning "to normalcy", and on capital outflow that there is "no need to rush to convert" yuan into dollars
- no need to weaken the yuan to stimulate exports or boost competitiveness
- Housing market is still under pressure to destock
On bad loans, Zhou said one solution is to allow banks to repackage them as securities & then sell them to investors, though he acknowledged the the risks, eg. the role played in the global financial crisis by the securitization of questionable home mortgages: "We'll draw lessons from international experience'
Governor Zhou
Pan Gongsheng (a vice governor)
- Said some online lenders and property developers offering loans for down payments is adding to risks for both the financial and property sectors. He added that the practice was illegal
(If you are providing such loans ... you have been warned!)
More:
On the declines in China's foreign-exchange reserves, Yi Gang, said most of that drop was due to purchasing dollar funds to pay off about $100 billion in foreign debt last year. Looking ahead, "both capital inflows and outflows will be in a reasonable range"
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There is nothing in the comments to frighten the markets ... although the economic data from China on Saturday was a bit on the nose and is a slight negative (and of course, the silver lining is optimists will say it increases the likelihood of more stimulus. Yes, something for everyone!)
