Chinese Economic Powerhouse He Lifeng: "Promote Domestic Demand and Financial Support through Easing Monetary Policy"

He Lifeng, the influential Deputy Premier in charge of China's economic policy, emphasized promoting domestic demand through a 'moderately accommodative' monetary policy and supporting real estate companies facing financial difficulties.

Hu Lipeng, Vice Premier of China / Photo by Yonhap News

According to the Financial Times on the 13th, Deputy Premier He (Director of the Central Financial Commission Office and concurrently Secretary of the Central Financial Work Commission) stated at the National Financial System Work Conference held in Beijing that "a moderately accommodative monetary policy should be implemented to more vigorously support the expansion of domestic demand, the development of new quality productive forces, and the economic transformation and upgrading."

Earlier, the Political Bureau of the Communist Party of China Central Committee, chaired by General Secretary (and President) Xi Jinping, changed the policy stance on the 9th from the 'proactive fiscal policy and prudent monetary policy' maintained since 2011 to a 'more proactive fiscal policy and moderately accommodative monetary policy.' This marks the first change in 14 years and is interpreted as a sign of the state’s intention to use 'national power' more to overcome economic difficulties.

Deputy Premier He also reiterated the need for financial support to revive the real estate market.

He said, "The role of the urban real estate financing cooperation mechanism should be fully utilized to expand the scope and effectiveness of the 'whitelist' project, consolidate the trend of halting the decline and recovery of the real estate market, and promptly establish a financial service system suitable for the new model of real estate development."

Amid domestic and international concerns that the real estate downturn has become a structural risk, Chinese authorities introduced a loan whitelist policy targeting financially troubled high-quality state-owned and private real estate companies at the end of last year. Commercial banks have been encouraged to actively lend to whitelist companies.

Since the policy’s introduction, major companies such as Biguiyuan (Country Garden), Longfor (Sunac China), Simao, Greenland, and CIFI, which were previously identified as 'real estate risk' companies, have consecutively benefited.

Deputy Premier He stated, "The financial system must unify its ideology and awareness with the spirit of the Central Economic Work Conference, especially the important speeches of General Secretary Xi Jinping. In line with Premier Li’s work arrangements, it must implement the 'nailing spirit' (a term derived from Xi’s remarks emphasizing diligence and perseverance) under the policy of risk prevention, strengthened supervision, and promotion of development."

This content was produced with the assistance of AI translation services.