Chinese government and central bank identify targets for progress

The People's Bank of China has published a document outlining discussions from a weekend government planning meeting. In it, aims are set out for the progression of the financial sector and, in particular, the central bank.

The People's Bank of China is set to maintain "prudent" monetary policies in 2012, to support growth in the economy, the document states. Governor Zhou Xiaochuan attended the gathering, which covered development of financial industries and markets over the next five years in China.

While no specific detailed financial reforms were announced, several key indicators were given of the intended route forward for the country. Support was expressed for the continued expansion of the cross-border use of the renminbi, something that has been happening gradually in recent years.

China's participation in international bodies such as the Financial Stability Board and the Basel Committee on Banking Supervision is safe as the discussion of the long-term improvement of financial stability directly mentioned the success of these endeavours.

The continued enhancements to financial laws and regulations in China was commended in the document, as was progress in the electronic interbank settlements system. The central bank was asked to continue with its efforts to develop the financial market reputation and to deepen the reform of financial institutions.

Other aims set out for the central bank included: to strengthen the monitoring of systemic risk and to deal with such problems as they arise; encourage the modernisation of financial services provided in China; deepen foreign exchange management in order to prevent harmful capital flows; and to continue improving internal management.