China reiterates prudent, neutral monetary policy

BEIJING - China's central bank reiterated Saturday that it will implement a prudent and neutral monetary policy while keeping liquidity basically stable.

In a statement issued after a quarterly meeting, the People's Bank of China (PBOC) said it will continue "seeking progress while maintaining stability", a tone set for the country's economic work at the Central Economic Work Conference, and adapting to an economic "new normal" that feature slower but higher quality growth.

The PBOC said it will optimize financing and credit structure by promoting direct financing in line with the requirements of supply-side structural reform.

It will also continue to deepen reform of financial system, improve operating efficiency in the financial sector to better serve the real economy, while strengthening risk management.

The country will further advance market-based interest rate reform and seek improvement in RMB exchange rate formation mechanism to keep the rate basically stable at an appropriate and balanced level.

China's economy maintained steady growth, but is confronting with a complex economic situation, according to the statement.

Global economy is gradually recovering, with recovery in the developed economies largely sustained, but challenges remain in some emerging economies and hidden risks lie in international financial market, the statement said.

The quarterly meeting was chaired by Zhou Xiaochuan, the PBOC governor and also the chairman of its monetary policy committee.

China's economy expanded 6.9 percent in the first six months, well above the target of around 6.5 percent for the whole year.