China’s central bank vows to boost money supply, cut borrowing costs in growth push

China’s central bank has pledged more liquidity and lower borrowing costs in the second half of the year, as part of a broader strategy to boost growth and implement long-term financial reforms.

At a key mid-year meeting on Friday, the People’s Bank of China said it would maintain a moderately loose monetary policy by cutting reserve requirement ratios and key interest rates, while making full use of targeted tools to lower overall financing costs.

Amid external uncertainties, sluggish domestic demand, as well as persistent deflationary pressure, the central bank also vowed to refine its monetary policy framework, guide market expectations more effectively, and strengthen coordination with fiscal policies to support innovation, consumption, small and micro businesses, and exports.

In particular, the bank said it would target “idle capital circulation and ‘involution style’ competition in the financial industry”, a reference to self-defeating competition that drains resources without improving outcomes.