Major press conference: Reserve requirement ratio cut and interest rate reduction are here!

At 9 a.m. today, the State Council Information Office will hold a press conference, inviting the heads of the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission to introduce the situation regarding the "package of financial policies to support market stability and expectations."

At the meeting, the Governor of the People's Bank of China, Pan Gongsheng, announced a reduction in the reserve requirement ratio and interest rates, which will lower the reserve requirement ratio for financial institutions by 0.5 percentage points and reduce the policy interest rate by 0.1 percentage points, from the current 1.5% to 1.4%, while also lowering the housing provident fund interest rate by 0.25 percentage points.

Li Yunzhe, head of the Financial Regulatory Administration, stated that a package of policies to support financing for small and micro enterprises and private enterprises will be introduced as soon as possible, deepening and solidifying the financing coordination work mechanism to help stabilize enterprises and the economy. Measures will be formulated and implemented to safeguard the development of foreign trade in the banking and insurance industries, providing precise services to market entities significantly affected by tariffs, fully assisting in stabilizing operations and expanding markets.

Wu Qing, chairman of the China Securities Regulatory Commission, stated that there will be winds and rains on the road ahead, whether it is a light breeze or a heavy storm, whether it is high winds and rough seas or turbulent waves, we have the confidence, conditions, and capability to achieve stable and healthy development of the Chinese stock market.

Reserve Requirement Ratio and Interest Rate Cut, Personal Provident Fund Loan Rate Reduced

Pan Gongsheng, governor of the People's Bank of China, stated at the press conference that the reserve requirement ratio for financial institutions will be lowered by 0.5 percentage points, which is expected to provide approximately 1 trillion yuan in long-term liquidity to the market; the reserve requirement system will be improved, and the reserve requirement ratio for auto finance companies and financial leasing companies will be reduced from the current 5% to 0% on a phased basis.

The policy interest rate will be reduced by 0.1 percentage points, meaning that the 7-day reverse repurchase operation rate in the open market will be lowered from the current 1.5% to 1.4%, which is expected to drive the loan market quoted interest rate (LPR) down by about 0.1 percentage points; the interest rate for structural monetary policy tools will be reduced by 0.25 percentage points, including: the interest rates for various special structural tools and re-lending rates for agriculture and small enterprises will be lowered from the current 1.75% to 1.5%; the interest rate for pledged supplementary loans (PSL) will be lowered from the current 2.25% to 2%.

The personal housing provident fund interest rate will be reduced by 0.25 percentage points, with the interest rate for the first home over 5 years dropping from 2.85% to 2.6%, and the rates for other terms will be adjusted accordingly.

Optimization of Two Monetary Policy Tools Supporting Capital Markets

Pan Gongsheng stated that a "service consumption and pension re-lending" fund of 500 billion yuan will be established, guiding commercial banks to increase credit support for service consumption and pensions. An additional 300 billion yuan will be added to the re-lending quota for agriculture and small enterprises, forming a synergistic effect with the policy of lowering related tool interest rates, supporting banks in expanding loans to agriculture, small and micro enterprises, and private enterprises.

Two monetary policy tools supporting capital markets will be optimized, merging the 500 billion yuan swap convenience for securities, funds, and insurance companies with the 300 billion yuan quota for stock repurchase and increase re-lending, for a total quota of 800 billion yuan Establish risk-sharing tools for technology innovation bonds, with the central bank providing low-cost relending funds that can be used to purchase technology innovation bonds. Collaborate with local governments and market-oriented credit enhancement institutions to share part of the default loss risk through diversified credit enhancement measures such as joint guarantees, supporting technology innovation enterprises and equity investment institutions in issuing low-cost, long-term technology innovation bonds for financing.

Confidence, Conditions, and Capability to Achieve Stable and Healthy Development of China's Stock Market

China Securities Regulatory Commission Chairman Wu Qing stated at the press conference that efforts will be made to consolidate the momentum of market stability and improvement, dynamically improve work plans to respond to various external risk attacks, and fully support the Central Huijin Investment Ltd. in playing the role of a stabilizing fund; expedite the release of major asset restructuring management measures for listed companies and related regulatory guidelines to better leverage the capital market as the main channel for mergers and acquisitions.

Wu Qing stated, The most important characteristic of our capital market is "reliable." We have confidence, conditions, and capability to achieve the stable and healthy development of China's stock market.

Accelerate the Introduction of a Series of Financing Systems Compatible with the New Model of Real Estate Development

Li Yunze, Director of the Financial Regulatory Administration, stated at the press conference that a series of financing systems compatible with the new model of real estate development will be introduced as soon as possible to help continuously consolidate the stability of the real estate market. Further expand the pilot scope for long-term investment of insurance funds to introduce more incremental funds into the market.

Launch a Package of Policies to Support Financing for Small and Micro Enterprises and Private Enterprises as Soon as Possible

Li Yunze stated that a package of policies to support financing for small and micro enterprises and private enterprises will be launched as soon as possible, deepening and solidifying the financing coordination work mechanism to help stabilize enterprises and the economy; the initiative to establish financial asset investment companies will be expanded to include qualifying national commercial banks, increasing investment in technology innovation enterprises.

Expand the Pilot Scope for Long-term Investment of Insurance Funds, Planning to Approve Another 60 Billion Yuan

Li Yunze stated that the pilot scope for long-term investment of insurance funds will be further expanded. Recently, another 60 billion yuan is planned to be approved, injecting more incremental funds into the market.

Support Quality Chinese Concept Stocks to Return to the Mainland and Hong Kong Markets

Wu Qing stated at the press conference that foreign investment in A-shares has stabilized at around 3 trillion yuan, and the China Securities Regulatory Commission will unswervingly promote high-level opening-up of the capital market; strengthen bilateral and multilateral cross-border regulatory cooperation to create a stable, transparent, and predictable regulatory environment, safeguarding the legitimate interests of enterprises in overseas markets, and support quality Chinese concept stocks to return to the mainland and Hong Kong markets.

Incorporate Performance Relative to Benchmarks into the Assessment System for Fund Companies and Fund Managers

Wu Qing stated at the press conference that the China Securities Regulatory Commission will release the "Action Plan for Promoting the High-Quality Development of Public Funds" on the same day. He introduced that the reform will emphasize strengthening the binding of public funds with investors' interests, optimizing the fee structure for actively managed equity funds, and requiring lower management fees for underperforming funds through a floating management fee mechanism to reverse the phenomenon of fund companies "guaranteeing profits regardless of performance." At the same time, performance relative to benchmarks and indicators directly related to investors' interests, such as investors' gains and losses, will be incorporated into the assessment system for fund companies and fund managers, urging fund companies to shift from "focusing on scale" to "focusing on returns." The following is the full transcript of the press conference:

Shou Xiaoli, Director of the Press Bureau and Spokesperson of the State Council Information Office:

Ladies and gentlemen, good morning! Welcome to the press conference of the State Council Information Office. Today, we have invited Mr. Pan Gongsheng, Governor of the People's Bank of China, Mr. Li Yunze, Director of the Financial Regulatory Administration, and Mr. Wu Qing, Chairman of the China Securities Regulatory Commission, to introduce the "package of financial policies to support market stability and expectations" and answer your questions of concern.

Now, let's first invite Mr. Pan Gongsheng to give an introduction.

Pan Gongsheng, Governor of the People's Bank of China:

Good morning, dear reporters! I am very pleased to meet with you again and thank you for your long-term attention and support for the reform and development of the financial industry and the work of the People's Bank!

Since the beginning of this year, the People's Bank has earnestly implemented the spirit of the Central Economic Work Conference and the deployment of the "Government Work Report," effectively carried out a moderately loose monetary policy, strengthened counter-cyclical adjustments, and comprehensively utilized various monetary policy tools to serve the high-quality development of the real economy, creating a good monetary and financial environment for promoting sustained economic recovery.

In terms of effectiveness, various macro-financial data have been relatively good this year, with monetary credit showing characteristics of "increased quantity, decreased price, and optimized structure." By the end of the first quarter, the social financing scale increased by 8.4% year-on-year, and loans increased by 7.4% year-on-year (if the impact of replacing local special bonds with local financing platform loans is adjusted, the year-on-year growth rate of loans will exceed 8%). The broad money supply (M2) maintained a stable growth of around 7%, significantly higher than the nominal economic growth rate. At the same time, the cost of social financing remained low, with the growth rates of loans to inclusive small and micro enterprises, medium and long-term loans to the manufacturing sector, and loans to technology-based small and medium-sized enterprises all exceeding the overall loan growth rate, further optimizing the credit structure.

From the perspective of the financial market, the first quarter performed well. The stock market operated relatively smoothly, with active trading, and the Shanghai Composite Index remained around 3,300 points. The bond market self-corrected under the boost of improved economic confidence. The onshore and offshore RMB appreciated slightly by about 1% against the US dollar compared to the end of last year, and cross-border capital flows were relatively balanced.

Since April, despite facing significant external shocks, the domestic financial system has remained robust, and the financial market has shown strong resilience. After a drop on April 7, the Shanghai Composite Index quickly rebounded and stabilized, with the 10-year government bond yield hovering around 1.65%, and the RMB exchange rate against the US dollar slightly depreciated before recovering to around 7.2 yuan.

Currently, the global economy is full of uncertainties, with increasing economic fragmentation and trade tensions disrupting global industrial and supply chains, causing turbulence in international financial markets and weakening global economic growth momentum. Recently, I attended the spring meetings of the IMF and the World Bank in Washington, where central bank governors and heads of international financial organizations expressed deep concerns about this. The People's Bank will earnestly implement the central government's decision-making and deployment, promote high-quality economic development, unswervingly advance high-level opening-up, actively participate in international financial governance and cooperation, and maintain an international economic and financial order based on rules At the same time, coordinate financial opening-up and security, explore and expand the functions of the central bank's macro-prudential and financial stability, and firmly maintain the stable operation of China's foreign exchange market, bond market, stock market, and other financial markets.

On April 25th, the Central Political Bureau held a meeting to analyze and study the current economic situation and economic work. To implement the spirit of the Central Political Bureau meeting and further carry out a moderately loose monetary policy, the People's Bank of China will increase the intensity of macro-control and introduce a package of monetary policy measures, mainly consisting of three categories totaling ten measures.

First, quantity-based policies, such as lowering the reserve requirement ratio (RRR), will increase the supply of medium- and long-term liquidity and maintain ample market liquidity. Second, price-based policies will lower policy interest rates and reduce the interest rates of structural monetary policy tools, which are the rates at which the central bank provides relending to commercial banks, while also lowering the interest rates on housing provident fund loans. Third, structural policies will improve existing structural monetary policy tools and create new policy tools to support technological innovation, expand consumption, and promote inclusive finance.

These three categories of measures include ten specific policies:

First, reduce the reserve requirement ratio by 0.5 percentage points, which is expected to provide approximately 1 trillion yuan in long-term liquidity to the market.

Second, improve the reserve requirement system, temporarily lowering the reserve requirement ratio for auto finance companies and financial leasing companies from the current 5% to 0%.

Third, lower the policy interest rate by 0.1 percentage points, meaning the 7-day reverse repurchase operation rate in the open market will be reduced from the current 1.5% to 1.4%, which is expected to drive the loan market quoted interest rate (LPR) down by about 0.1 percentage points.

Fourth, lower the interest rates of structural monetary policy tools by 0.25 percentage points, including: the interest rates of various special structural tools and the relending rate for supporting agriculture and small enterprises, all reduced from the current 1.75% to 1.5%. These tool rates are the rates at which the central bank provides relending funds to commercial banks. The rate for pledged supplementary loans (PSL) will be reduced from the current 2.25% to 2%. Pledged supplementary loans are a tool for the central bank to provide funds to policy banks.

Fifth, lower the interest rate on personal housing provident fund loans by 0.25 percentage points, with the interest rate for first-time homebuyers for loans over five years reduced from 2.85% to 2.6%, and other term rates adjusted accordingly.

Sixth, increase the relending quota for technological innovation and technological transformation by 300 billion yuan, raising it from the current 500 billion yuan to 800 billion yuan. This relending tool already exists, and this time the quota is increased by 300 billion yuan, bringing the total quota to 800 billion yuan, continuously supporting the implementation of the "two new" policies, which refer to large-scale equipment updates and the replacement of old consumer goods, collectively referred to as "two new."

Seventh, establish a 500 billion yuan "service consumption and pension relending" to guide commercial banks to increase credit support for service consumption and pensions.

Eighth, increase the relending quota for supporting agriculture and small enterprises by 300 billion yuan, forming a synergistic effect with the policy of lowering relending rates, supporting banks to expand loans to agriculture-related, small, and private enterprises.

Ninth, optimize two monetary policy tools that support the capital market, combining the 500 billion yuan swap convenience for securities, funds, and insurance companies with the 300 billion yuan stock repurchase increase relending, using these two tools' quotas together for a total quota of 800 billion yuan

Tenth, establish a risk-sharing tool for technology innovation bonds, with the central bank providing low-cost re-lending funds to purchase technology innovation bonds, and collaborating with local governments and market-oriented credit enhancement institutions through diversified credit enhancement measures such as joint guarantees to share part of the default loss risk of the bonds, supporting the issuance of low-cost, long-term technology innovation bonds financing for technology innovation enterprises and equity investment institutions.

The three major categories mentioned above consist of ten specific policy measures, which we will gradually disclose and implement on the People's Bank of China website. Next, the People's Bank of China will continue to earnestly implement the various deployments of the Central Committee of the Communist Party of China and the State Council, effectively carry out a moderately loose monetary policy, and continuously manage monetary policy adjustments based on domestic and international economic and financial situations and financial market operations, while strengthening coordination with fiscal policy to promote high-quality economic development.

Thank you!

Shou Xiaoli:

Thank you, President Pan, for your introduction. Next, please Mr. Li Yunze to give an introduction.

Director of the Financial Regulatory Administration Li Yunze:

Good morning, media friends. It is a pleasure to meet you again and answer your questions. First of all, on behalf of the Financial Regulatory Administration, I would like to express my heartfelt gratitude to all media friends for their long-standing concern and support for financial regulatory work!

Since the beginning of this year, the Financial Regulatory Administration has resolutely implemented the decision-making and deployment of the Central Committee of the Communist Party of China and the State Council, earnestly carried out the spirit of the Central Political Bureau meeting on April 25, strengthened bottom-line thinking, intensified and expanded policy measures, actively responded to external shocks, and solidly promoted risk prevention, strengthened regulation, and promoted development.

First, the overall financial operation is stable. Currently, the various businesses of banking and insurance institutions are being carried out in an orderly manner, and the main regulatory indicators are all within a healthy range. The basic situation of large financial institutions is solid, playing a significant "ballast stone" role. The reform and risk management of small and medium-sized financial institutions have achieved important phased results. In the first four months, the capital adequacy ratio of banks and the solvency adequacy ratio of insurance companies have maintained a stable and improving trend, the non-performing loan ratio has decreased by about 0.1 percentage points year-on-year, and the provision coverage ratio has increased by about 10 percentage points year-on-year. It can be said that the industry's safety cushion continues to thicken.

Second, the effects of regulatory policies are continuously emerging. We have strengthened regulatory leadership, accelerated the improvement of regulatory systems, and revised and issued more than 30 various systems, including corporate governance, regulatory ratings, and consumer protection. We have formulated high-quality development opinions in the banking, insurance, and asset management sectors, enhancing specialized and characteristic development capabilities. We guide the industry to deeply promote cost reduction and efficiency enhancement, further consolidating the foundation for sustainable development. We have improved the capital replenishment mechanism, and the capital replenishment work of large commercial banks is being accelerated, while the capital replenishment of large insurance groups has been put on the agenda, and various regions are also orderly replenishing the capital of small and medium-sized financial institutions through multiple channels. These measures will further enhance the resilience of the financial system and its ability to serve high-quality development.

Third, the quality and efficiency of services have been significantly improved. We have formulated special implementation plans for technology, green finance, pension, and inclusive finance, introduced multiple financial policies to support consumption and foreign trade, increased support for the "two heavies" and "two news" fields, and strengthened livelihood protection. In the first four months, the banking and insurance sectors provided approximately 17 trillion yuan in new financing for the real economy through loans, bonds, and other means. Since the expansion of the no-repayment renewal loan policy in September last year, a total of 4.4 trillion yuan has been renewed for small and micro enterprises, better meeting the financing needs of enterprises The amount of short-term export credit insurance underwritten increased by 15.3% year-on-year, providing strong support for stabilizing foreign trade. From January to April this year, the insurance industry paid out approximately 1 trillion yuan, and the number of insured new energy vehicles exceeded 10 million. Meanwhile, the long-term reserve funds accumulated by insurance companies for the public's pension and health insurance protection have surpassed 10 trillion yuan.

Next, we will, in accordance with the requirements of the Central Committee of the Communist Party of China and the State Council, further enhance our sense of responsibility, urgency, and initiative in implementation, intensify efforts to ensure that established policies are effectively implemented, accelerate the strengthening of incremental policy reserves, continuously improve response plans, and fully consolidate the positive fundamentals of economic recovery. Recently, we will introduce the following eight incremental policies.

First, accelerate the introduction of a series of financing systems compatible with the new model of real estate development to help continuously stabilize the real estate market.

Second, further expand the pilot scope for long-term investment of insurance funds to bring more incremental funds into the market.

Third, adjust and optimize regulatory rules, further reduce the risk factors for stock investments by insurance companies, and support the stabilization and activation of the capital market.

Fourth, quickly launch a package of policies to support financing for small and micro enterprises and private enterprises, deepen and solidify the financing coordination work mechanism, and help stabilize enterprises and the economy.

Fifth, formulate and implement a series of policy measures for the banking and insurance industries to support foreign trade development, providing precise services to market entities significantly affected by tariffs, and fully assist in stabilizing operations and expanding markets.

Sixth, revise and issue management measures for merger and acquisition loans to promote the accelerated transformation and upgrading of industries.

Seventh, expand the subjects initiating the establishment of financial asset investment companies to qualified national commercial banks, increasing investment in technology innovation enterprises.

Eighth, formulate opinions on the high-quality development of technology insurance, better play the role of risk sharing and compensation, and effectively provide strong support for technological innovation.

Thank you.

Shou Xiaoli:

Thank you, Director Li Yunze, for your introduction. Next, please Mr. Wu Qing for the introduction.

Chairman of the China Securities Regulatory Commission Wu Qing:

Ladies and gentlemen, media friends, good morning! First of all, thank you for your long-standing concern and support for the capital market and the work of the China Securities Regulatory Commission! Since the beginning of this year, the CSRC has thoroughly implemented a series of decision-making deployments from the Central Committee of the Communist Party of China and the State Council, continuously promoting the new "National Nine Articles" and a series of policy documents to achieve results, with the overall market operation steadily improving. Since early April, the U.S. government's tariff policies have severely impacted the international economic and trade order, causing significant turbulence in the international financial market, which has also put great pressure on the domestic capital market. In the face of this sudden severe test, under the strong leadership of the Central Committee of the Communist Party of China and the State Council, and with the overall coordination of the Central Financial Office, the CSRC, in conjunction with relevant departments, quickly took action, launching a package of "composite punches" to stabilize the market from the aspects of policy hedging, capital hedging, and expectation hedging. This includes strong policy signals released by the People's Bank of China, the Financial Regulatory Administration, the State-owned Assets Supervision and Administration Commission, and the State Administration of Foreign Exchange, among others. The Central Huijin Investment Company acted decisively, and national social security funds, securities fund institutions, banking and insurance institutions, and various investors all expressed confidence and actively invested, with a large number of listed companies adopting various methods such as repurchase and increase holdings to maintain stock price stability. As the saying goes, many hands make light work, and we weather the storm together With the joint efforts of a wide range of investors and market participants, the A-share market has experienced a significant rebound and stabilization after an initial period of substantial volatility, demonstrating strong resilience and risk resistance.

On April 25th, the Central Political Bureau meeting emphasized the need to "continuously stabilize and activate the capital market," fully reflecting the Party Central Committee's high regard and earnest expectations for stabilizing the market and expectations. We will make every effort to implement this, adhering to the principle of "two strengths and two strictness," unwaveringly managing our own affairs, striving to reflect "stability" in market operations while also embodying "progress" in stimulating market vitality and strengthening market functions.

First, we will make every effort to consolidate the momentum of market stabilization and improvement. We will strengthen market monitoring and comprehensive risk assessment, dynamically improve work plans to respond to various external risk shocks, and fully support the Central Huijin Investment Ltd. in playing a strong role akin to a "stabilization fund." The Central Huijin Investment Ltd. will conduct strong operations at the forefront, with the People's Bank of China as the backing, which is one of the most powerful and effective models in the world. We will cooperate with the People's Bank of China to improve the long-term mechanism for monetary policy tools that support the capital market, better leveraging the stabilizing functions of all market participants.

Second, we will highlight the service to the development of new productive forces as an important focus. We will prioritize several key tasks: First, we will soon introduce policies and measures to deepen the reform of the Sci-Tech Innovation Board and the ChiNext, releasing them at the right opportunity, further enhancing the institutional inclusiveness and adaptability in terms of market levels, review mechanisms, and investor protection, while also promoting the implementation of typical cases as soon as possible. Second, we will expedite the release of the newly revised "Administrative Measures for Major Asset Restructuring of Listed Companies" and related regulatory guidelines, better playing the main channel role of the capital market in mergers and acquisitions. Third, we will vigorously develop technology innovation bonds, optimize the issuance and registration process, and improve credit enhancement support to provide comprehensive and "relay-style" financial services for technology innovation enterprises.

Third, we will vigorously promote the entry of medium- and long-term funds into the market. While guiding listed companies to improve governance and performance, continuously enhancing investor returns, we will make greater efforts to "attract long-term funds," collaborating with all parties to continue increasing the scale and proportion of various medium- and long-term funds entering the market, and promptly issue and implement the "Action Plan for Promoting the High-Quality Development of Public Funds," which will be released today. This will better reflect the shared fortunes and mutual achievements between fund managers and investors, striving to form a virtuous cycle of "increased returns - funds entering - market stability."

The stability of the stock market is related to the overall economic and social situation and the vital interests of billions of investors. Currently, the trend of economic stabilization and improvement in our country is continuously consolidating, and relevant parties have made sufficient policy preparations to respond to external shocks. This not only injects more certainty into the uncertain global economy but also creates a solid foundation and conditions for the stable operation of our capital market. Our confidence and assurance regarding the capital market mainly come from four aspects: First, the strong leadership of the Party Central Committee and the State Council, along with their firm determination and effective deployment to maintain market stability. Everyone can see that these are solid actions with tangible results. Second, the implementation of the capital market "1+N" policy system has promoted positive and profound changes in the internal structure of the market, accelerating the formation of a coordinated investment and financing ecosystem. Third, the "technology narrative" logic of the A-share market is becoming increasingly clear, with the agglomeration effect becoming more evident, and the enormous potential for the development of new productive forces will increasingly manifest alongside high-quality economic development. The deep integration of technological innovation and industrial innovation will provide more valuable sources of liquidity for the capital market Fourth, the valuation level of the A-share market is actually considered to be relatively low by the industry. The price-to-earnings ratio of the CSI 300 is only 12.3, and the price-to-earnings ratios of major domestic market indices are significantly lower than those of global major indices such as the S&P 500. In an environment where global markets face an increasing number of instability factors, the allocation value and attractiveness of Chinese assets are continuously rising. In simple terms, we have reliable economic development, reliable macro policies, and reliable institutional guarantees, which inject more certainty into our economy and capital markets in the context of uncertainty.

In summary, encountering wind and rain on the road ahead is normal. Whether facing light winds and drizzles or strong winds and heavy rains, whether in turbulent seas or stormy waves, we are fully capable, confident, and able to achieve stable and healthy development of the Chinese stock market. Thank you!

Shou Xiaoli:

Thank you, Chairman Wu, for your introduction. Next, we will enter the Q&A session. Please announce your news organization before asking questions.

CCTV Reporter:

President Pan just mentioned that the reserve requirement ratio and policy interest rates will be lowered, which has attracted a lot of attention. Could you provide more details? Thank you.

Pan Gongsheng:

Thank you for your question. The adjustments to monetary policy measures, such as policy interest rates and reserve requirement ratios, are of great concern to all parties. The Central Economic Work Conference in December last year and this year's Government Work Report both clearly stated that this year we will implement a moderately loose monetary policy and appropriately lower the reserve requirement ratio and interest rates. The moderately loose monetary policy mainly has several connotations: first, abundant liquidity, with relatively loose social financing conditions, including reasonable growth in macro financial aggregates such as social financing scale and broad money supply, and relatively low comprehensive financing costs for society. Second, the implementation of policies requires timely decision-making, comprehensively assessing domestic and international economic and financial situations and the operation of financial markets, and dynamically adjusting using various monetary policy tools. Third, the orientation of monetary policy is a description of the state; in recent years, the People's Bank has continuously lowered the reserve requirement ratio and interest rates, indicating that the monetary policy state is supportive and relatively loose.

Let me elaborate on the several adjustments to the total monetary policy measures I just announced.

First, regarding the reduction of the reserve requirement ratio. This time, the reserve requirement ratio will be lowered by 0.5 percentage points, providing approximately 1 trillion yuan in long-term liquidity to the financial market. By lowering the reserve requirement ratio, we can optimize the structure of liquidity provided by the central bank to the banking system, reduce the cost of bank liabilities, and enhance the stability of bank liabilities. At the same time, we will temporarily lower the reserve requirement ratio for auto finance companies and financial leasing companies from the current 5% to 0%. These two types of institutions directly provide financial support for automotive consumption and equipment renewal investments. After lowering the reserve requirement ratio, it will effectively enhance the credit supply capacity of these two types of institutions in specific areas.

Second, regarding the reduction of interest rates, there are three aspects: first, the policy interest rate will be lowered by 0.1 percentage points. The so-called policy interest rate refers to the 7-day reverse repurchase operation rate in the central bank's policy system, which is currently at 1.5% and will be lowered to 1.4%. Through market-based interest rate transmission, it is expected to drive the Loan Prime Rate (LPR) down by 0.1 percentage points At the same time, we will guide commercial banks to correspondingly lower deposit rates through a self-discipline mechanism for interest rates. Second, we will reduce the interest rates of all structural monetary policy tools by 0.25 percentage points. Structural monetary policy tools generally refer to loans provided by the central bank to commercial banks, which is expected to save banks approximately 15-20 billion yuan in funding costs annually, promoting banks to strengthen support for economic structural transformation. Third, we will lower the interest rates on personal housing provident fund loans by 0.25 percentage points. Among them, the interest rate for the first home with a term of more than five years will be reduced from 2.85% to 2.6%, and the rates for other terms will be adjusted simultaneously. It is expected to save residents more than 20 billion yuan in interest expenses on provident fund loans annually, which is beneficial to support the rigid housing demand of residents and promote the stabilization of the real estate market.

At the same time, the People's Bank of China will further improve the monetary policy framework, continuously strengthen the implementation and supervision of interest rate policies, and enhance regulations on unreasonable market behaviors that easily undermine the transmission of monetary policy, smooth the transmission mechanism of monetary policy, and improve resource allocation efficiency.

The aforementioned policy measures will provide financial institutions with a considerable amount of low-cost medium- and long-term funds, which is conducive to reducing the liability costs of financial institutions and stabilizing net interest margins. The policy effects will further transmit to the real economy, driving the overall financing costs of society to stabilize and decline, boosting market confidence, and effectively supporting stable growth in the real economy. Thank you.

21st Century Business Herald Reporter:

Chairman Wu, what impact might the increased tariffs have on the production and operation of A-share listed companies? How will the China Securities Regulatory Commission support listed companies in coping with this?

Wu Qing:

Thank you very much for your question! Regarding the impact of the U.S. increased tariffs, many A-share listed companies have recently disclosed information through announcements and performance briefings. Overall, the U.S. abuse of tariffs has severely impacted the global economic and trade order, and the production and operation of listed companies will inevitably be directly or indirectly affected, with some being more affected than others, particularly those companies with a higher proportion of exports to the U.S. A-share listed companies, as representatives of excellent enterprises in the Chinese economy, possess strong resilience and adaptability. First, the super-large scale of domestic demand and potential demand is the greatest confidence. Nearly 90% of the revenue of A-share listed companies still comes from the domestic market. The stable and improving fundamentals of the Chinese economy determine that the operating performance of listed companies will continue to grow steadily. In 2024, three-quarters of listed companies are expected to be profitable, and half of the companies will see profit growth, especially with artificial intelligence leading the wave of technological industries, where net profits in related industries such as semiconductors and consumer electronics have increased by 13.2% and 12.9% year-on-year, respectively. At the same time, we see that the entire market's dividends and buybacks have also reached historical highs, with the dividend yield of the CSI 300 Index reaching 3.6%. In the first quarter of this year, from the quarterly reports, the net profit of listed companies increased by 3.6% year-on-year, with net profits of real economy listed companies increasing by 4.3% year-on-year. Second, the effectiveness of building diversified export markets is significant. Since the U.S. imposed tariffs on us in 2018, A-share listed companies have gradually adjusted and improved their overseas production capacity layout, and those with conditions are making adjustments to further explore new markets. Export revenue was 4.9 trillion yuan in 2018 and is expected to reach 9.4 trillion yuan in 2024, a growth of 92%, nearly doubling; At the same time, the proportion of direct export revenue to the United States in operating income has significantly decreased, with 91% of companies reporting that their export revenue to the U.S. accounts for less than 10%. Third, export competitiveness continues to improve. "Made in China" has deeply embedded itself in the global industrial and supply chains, and A-share listed companies possess strong competitive advantages in product quality stability, economies of scale in production, and technological innovation. Since April 7, in less than a month, nearly 350 listed companies have disclosed repurchase and increase plans, reflecting their confidence in their own value and development prospects.

Listed companies are an important part of the Chinese economy and the cornerstone of the capital market. Moving forward, the China Securities Regulatory Commission (CSRC) will continue to promote the functioning of the capital market, striving to convey a sense of regulatory warmth while strengthening oversight, and doing its best to help affected enterprises cope with the impact of U.S. tariffs. First, we will further increase visits and assistance. From last year to the end of March this year, the CSRC, in conjunction with local governments, has visited a total of 2,352 listed companies, helping to resolve over 3,300 pain points and difficulties. We will continue to work with relevant parties to carry out this work. Second, we will optimize regulatory arrangements. For listed companies that are significantly affected by tariff policies, we will enhance regulatory tolerance in areas such as equity pledges, refinancing, and the use of raised funds to help alleviate difficulties. We will further improve the rules related to information disclosure exemptions and guide listed companies to strengthen effective communication with investors. Third, we will support transformation and upgrading, especially by supporting listed companies in their transformation and upgrading through mergers and acquisitions. Since the release of the "Six Guidelines for Mergers and Acquisitions" last year, nearly 1,400 restructuring projects have been disclosed in the Shanghai and Shenzhen stock markets, a year-on-year increase of 40%, with over 160 major asset restructurings, a year-on-year increase of 2.4 times. We are currently revising the "Administrative Measures for Major Asset Restructuring of Listed Companies" and related regulatory guidelines to further improve the supporting measures for the "Six Guidelines for Mergers and Acquisitions," providing greater support for listed companies' mergers and acquisitions, enhancing their strength, vitality, quality, and continuously improving their innovation capabilities and risk resistance. Fourth, we will strengthen support for multi-level capital market products and services. We will support listed companies in utilizing various tools such as stocks, bonds, and REITs for direct financing, and encourage eligible domestic enterprises to legally and compliantly list overseas, enhancing their global market expansion capabilities. Thank you!

Economic Daily Reporter:

The real estate market and stock market are important indicators of economic operation, as Director Li just mentioned. What considerations does the Financial Regulatory Bureau have regarding stabilizing the real estate and stock markets? Thank you.

Li Yunzhe:

Thank you for your question. Stabilizing the real estate and stock markets is of great significance for boosting social expectations and facilitating domestic demand circulation. On April 25, the Central Political Bureau meeting reiterated clear requirements for stabilizing the real estate and stock markets. The Financial Regulatory Bureau firmly implements the deployment requirements of the Party Central Committee and the State Council, coordinating to effectively carry out related work.

In terms of stabilizing the real estate market, we are solidly promoting the expansion and efficiency of the urban real estate financing coordination mechanism, supporting the battle to ensure housing delivery. Currently, the "white list" loans approved by commercial banks have increased to 6.7 trillion yuan, supporting the construction and delivery of over 16 million residential units, effectively safeguarding the legitimate rights and interests of homebuyers and providing important support for stabilizing the real estate market The positive changes in the real estate market are also reflected in the credit data. In the first quarter of this year, the balance of real estate loans increased by more than 750 billion yuan, with new personal housing loans reaching the largest quarterly increase since 2022, and housing rental loans growing by 28% year-on-year. Recently, some leading international investment institutions that have come to China also believe that the investment value of the Chinese real estate market is gradually emerging. Next, we will accelerate the improvement of a series of financing systems that are compatible with the new model of real estate development, including loan management methods for real estate development, personal housing, and urban renewal. We will guide financial institutions to continue to maintain stable real estate financing, effectively meet rigid and improved housing demand, strengthen the funding supply for high-quality housing, and help continuously consolidate the stability of the real estate market.

Regarding stabilizing the stock market, we fully leverage the advantages of insurance funds as patient capital and long-term capital, increasing efforts to stabilize the market. Previously, we launched pilot reforms for long-term investment of insurance funds, providing substantial incremental funds to the stock market. Last month, we raised the upper limit of the investment ratio for equity assets of insurance funds, further releasing investment space. Next, we will introduce several specific measures to continue supporting the stability and vitality of the capital market. First, we will further expand the pilot scope of long-term investment of insurance funds. Recently, we plan to approve an additional 60 billion yuan to inject more incremental funds into the market. Second, we will adjust solvency regulatory rules, further reducing the risk factor for stock investments by 10%, encouraging insurance companies to increase their market participation. Third, we will promote the improvement of long-cycle assessment mechanisms to motivate institutions and promote the realization of "long money long investment."

Thank you.

First Financial Journalist:

President Pan just mentioned that structural monetary policy tools will be created and strengthened, which will have a positive effect on economic structural adjustment. Could you please elaborate on this? Thank you.

Pan Gongsheng:

Traditionally, monetary policy is mainly a total quantity tool, but in the operation of the Chinese economy, it is well understood that many contradictions and challenges are structural. If the structure is not well adjusted, total control will also be difficult to play an effective role. Structural monetary policy tools help to promote the resolution of some structural contradictions and problems. Over the years, the People's Bank of China has continuously explored in practice, following the principles of "focusing on key points, being reasonable and moderate, with both advances and retreats," and has successively created multiple structural monetary policy tools. Currently, a monetary policy regulation framework has been formed with total quantity tools as the mainstay and structural tools as a supplement. By the end of April, there were 9 existing structural policy tools, mainly focusing on key areas of the national economy, major strategies, and weak links, with a stock balance of approximately 5.9 trillion yuan, accounting for 13% of the People's Bank of China's balance sheet size, which is at a reasonable level.

Structural monetary policy tools, generally referred to as relending, are loans from the central bank to financial institutions. These tools generally embed incentive mechanisms to guide commercial banks to independently issue loans to market entities. In recent years, under the guidance of structural monetary policy tools, the credit issuance structure of financial institutions has undergone qualitative changes. It is well known that in previous years, commercial banks had significant risk exposures in areas such as real estate and local financing platforms, and in recent years, these risk exposures have gradually converged The intensity, adaptability, and precision of financial support for the real economy have significantly improved.

This time we have created and strengthened the implementation of a series of structural monetary policy tools, which include both an increase in quantity and preferential pricing, better leveraging the guiding and driving role of structural monetary policy tools.

First, the interest rate of structural monetary policy tools has been reduced by 0.25 percentage points. The interest rates for structural monetary policy tools such as re-loans for supporting agriculture and small enterprises, re-loans for technological innovation and technological transformation, carbon reduction support tools, re-loans for stock repurchase increases, and re-loans for affordable housing have been lowered from the current 1.75% to 1.5%. At the same time, the interest rate for the pledged supplementary loan (PSL) for policy financial institutions has been reduced from the current 2.25% to 2%.

Second, a re-loan of 500 billion yuan has been established for service consumption and elderly care. Currently, the focus of our economic policy is to expand domestic demand and vigorously boost consumption, with service consumption being an important focus for consumption upgrade and expansion. To enhance and improve the supply of service consumption, the People's Bank of China has established the "Service Consumption and Elderly Care Re-loan" tool to incentivize and guide financial institutions to increase financial support for key areas of service consumption such as accommodation and catering, cultural and entertainment, education, and the elderly care industry, and to coordinate with fiscal and other industry policies to better meet the public's demand for consumption upgrades. This tool is also an innovative measure by the People's Bank of China to support the boost in consumption, with a quota of 500 billion yuan.

Third, the quota for re-loans for technological innovation and technological transformation has been increased from 500 billion yuan to 800 billion yuan. This tool was established in April 2024 by the People's Bank of China in conjunction with the National Development and Reform Commission, the Ministry of Science and Technology, and other departments, with an initial quota of 500 billion yuan, effectively supporting technological transformation and equipment updates for small and medium-sized enterprises and key sectors. This time we have increased the re-loan quota by 300 billion yuan to 800 billion yuan, supporting the expansion of the "two new" policies.

Fourth, the quota for re-loans supporting agriculture and small enterprises has been increased by 300 billion yuan. After the increase, the total quota for the People's Bank of China’s re-loans to financial institutions for supporting agriculture and small enterprises will reach 3 trillion yuan. Coupled with the recent reduction in re-loan interest rates, this will create a synergistic effect of quantity and price, further supporting commercial banks in expanding loans to agriculture, small and micro enterprises, especially small and medium-sized private enterprises.

In the future, based on the economic and financial operation situation and the effectiveness of the use of various tools, we can also expand the scale of the tools, improve the policy elements of the tools, or create new policy tools. Thank you.

Hong Kong South China Morning Post Reporter:

In the context of the China-U.S. trade conflict, for enterprises with a high dependence on foreign trade, are there any other relief measures besides "continuous lending and no withdrawal of loans"? What specific support measures are there for small and micro enterprises? Thank you.

Li Yunzhe:

Thank you for your question. In recent years, we have continuously deepened the structural reform of the financial supply side, guiding banks and insurance institutions to continuously improve service adaptability, encouraging the development of differentiated and personalized products to better meet the financial needs of enterprises of different sizes and types. In particular, in response to the financing difficulties faced by small and micro enterprises and private enterprises, we have taken the lead in establishing a special financing coordination mechanism to promote low-cost funds to quickly reach enterprises. Currently, more than 67 million business entities have been visited across the country, and loans totaling 12.6 trillion yuan have been issued, of which about one-third are credit loans

Recently, the General Administration, in conjunction with relevant departments, is set to further introduce a package of policies to support financing for small and micro enterprises and private enterprises, focusing on four key areas:

First, increase supply by continuing to deepen and solidify the financing coordination work mechanism, conducting in-depth "thousand enterprises and ten thousand households" visits, increasing the issuance of first loans, renewal loans, and credit loans, driving the growth rate of inclusive small and micro enterprise loans to exceed the average growth rate of various loans.

Second, reduce costs by timely transmitting market interest rate dividends and internal fund transfer pricing benefits, while standardizing cooperation between institutions and third parties, promoting a stable decline in comprehensive financing costs, and further alleviating the burden on enterprises.

Third, improve efficiency by promoting banks to simplify internal processes, enhance loan approval timeliness, flexibly meet various financing needs, and alleviate the cash flow pressure on enterprises.

Fourth, optimize the environment by strengthening the coordination of monetary, fiscal, industrial, and regulatory policies, accelerating the improvement of relevant systems in areas such as guarantee enhancement, credit repair, and classification standards, creating a more suitable development environment.

In the context of increasing external shocks, we will formulate and implement a series of policy measures to support foreign trade development in the banking and insurance industries, continuously increasing support from the financial aspect according to market-oriented and rule-of-law principles.

First, strengthen financial relief. Expand the financing coordination work mechanism to all foreign trade enterprises, promote banks to accelerate the implementation of various policies to stabilize foreign trade, ensuring that loans are fully utilized and renewed as needed. For market entities significantly affected by tariffs and temporarily facing operational difficulties, provide precise services on a "one enterprise, one policy" basis.

Second, enhance export stability. Optimize export credit insurance regulatory policies, improve underwriting capacity, provide preferential rates, implement quick compensation and pre-compensation, and stabilize enterprises' order-taking and export confidence. Urge institutions to provide financial services in key areas such as cross-border e-commerce and overseas warehouses, support the development of exclusive insurance, and guide banks to launch comprehensive, one-stop services to support the development of new foreign trade formats.

Third, assist in expanding domestic sales. Strengthen financing guarantees for foreign trade enterprises transitioning from export to domestic sales, guide the establishment of "domestic trade insurance co-insurance bodies," launch exclusive products, and promote the expansion and increase of domestic trade insurance. Implement multiple measures to support boosting consumption and expanding domestic demand, opening up space for foreign trade enterprises to expand sales channels, and facilitating the integration of domestic and foreign trade.

Thank you!

Reporter from the American International Market News Agency:

Question for Chairman Wu Qing. In the current complex and changing international situation, concerns are rising that trade tensions may spread to financial sectors. Will this affect China's capital market's opening to the outside world? What measures is the China Securities Regulatory Commission considering to respond? Thank you.

Wu Qing:

Thank you for your question! Opening up to the outside world is China's fundamental national policy and a necessary requirement for the high-quality development of the capital market. In recent years, the China Securities Regulatory Commission has resolutely implemented the Party Central Committee's important deployment on "improving the system and mechanism for high-level opening up" and "promoting high-level financial opening up," actively and steadily advancing comprehensive and two-way opening of markets, products, and institutions, continuously enhancing the convenience for foreign capital to participate in the domestic market, optimizing the Qualified Foreign Institutional Investor system, steadily expanding cross-border connectivity, fully lifting foreign ownership restrictions on industry institutions, and improving the efficiency of overseas listing filings, among other measures. Currently, foreign securities financial institutions and foreign capital have become important participants in the A-share market, with foreign capital holding a stable market value of around 3 trillion yuan in A-shares through QFII, Shanghai and Shenzhen Stock Connect, and other forms

Despite the current complex and changing external situation, the strategic direction for China's high-quality economic development is very clear and firm. The stability and predictability of macro policies have further increased, especially with timely adjustments to macro policies, which have further enhanced foreign investors' confidence in participating in China's capital markets. Recently, we have also seen many foreign institutions upgrading their ratings on Chinese stocks, conducting intensive research on A-share listed companies, and widely focusing on and positively evaluating China's capital markets and assets. In the next phase, the China Securities Regulatory Commission (CSRC) will unswervingly promote high-level opening-up of the capital market, further improve the pattern of opening-up, and steadily introduce a series of pragmatic measures for opening-up. First, continue to expand institutional openness. Further optimize the access services for qualified foreign institutional investors, efficiently handle the qualification approval and account opening as a single process, and further expand the investment scope. Support qualified foreign institutions to apply for qualifications for securities and fund investment consulting services. Encourage foreign investment institutions to set up RMB funds for investment in China in accordance with regulations. Second, further enrich product supply. Promote the opening of futures and options to qualified foreign institutional investors, and support domestic and foreign futures exchanges in expanding cooperation on commodity futures settlement price authorization. Deepen the opening-up of the exchange bond market, including REITs in the Shanghai-Shenzhen-Hong Kong Stock Connect. Third, continuously deepen market openness. Streamline and optimize the overseas listing filing mechanism, processes, and related elements to improve the quality and efficiency of overseas listing filings. Vigorously support the construction of the Shanghai International Financial Center and consolidate and enhance Hong Kong's status as an international financial center, steadily promote the inclusion of RMB stock trading counters in the Hong Kong Stock Connect, and support the launch of cross-border investment and risk management products in Hong Kong, among other cooperative measures with Hong Kong. Fourth, strengthen bilateral and multilateral cross-border regulatory cooperation. Adhere to respecting rules and regulations, actively shape a stable, transparent, and predictable regulatory environment, further strengthen cooperation in securities regulation and audit supervision, protect the legitimate interests of enterprises in overseas markets, and create conditions to support high-quality Chinese concept stocks returning to the domestic and Hong Kong stock markets, while also ensuring the protection of investors' legal rights and interests. Thank you!

Financial Times Reporter:

I noticed that the Financial Regulatory Administration previously launched several pilot measures to support technological innovation, and in April, it jointly issued the "Implementation Plan for High-Quality Development of Technology Finance in the Banking and Insurance Industries" with several ministries. Could you please provide an update on the implementation progress of these policies? What additional supportive measures will be taken? Thank you.

Li Yunzhe:

Thank you for your question. Developing technology finance is an essential path to promote the deep integration of technological innovation and industrial innovation. We continue to promote banks and insurance institutions to increase their support for technological innovation and actively explore new paths for technology finance. As of now, the loan growth rate for high-tech enterprises is nearly three times the average growth rate of all loans, and technology insurance provides coverage exceeding 2 trillion yuan. The multiple pilot policies we have launched have all made positive progress. The pilot for equity investment by financial asset investment companies has been strengthened and expanded, with the signed intention amount exceeding 380 billion yuan. The loan for mergers and acquisitions of technology enterprises is being carried out in an orderly manner, with the "first batch" of business in 18 pilot cities already implemented. The comprehensive pilot for the financial ecosystem of intellectual property is steadily advancing, with service platforms established in many places to accelerate the resolution of issues such as pledge registration and evaluation disposal. The service model for technology insurance is continuously optimized, and the insurance compensation mechanisms for first units and first batches are being continuously improved At the end of March this year, we established the first commercial aerospace mutual insurance body in Beijing. The "mutual insurance body" is an internationally accepted practice, a mechanism for multiple insurance companies to jointly share risks for an emerging industry or sector, which is very important for the development of startup industries and sectors with high uncertainty.

Next, we will focus on deepening existing pilot projects, actively expanding new models, improving the financial system that is compatible with technological innovation, and fully supporting the development of new productive forces.

First, optimize credit services. Promote the establishment of a special mechanism for credit support for technological innovation, support banks in orderly establishing specialized institutions for technology finance, and encourage the exploration of long-cycle performance assessment systems for technology loans. Recently, we are revising the management measures for merger loans, which will be implemented as soon as possible to further unleash the potential of merger loans and promote the accelerated transformation and upgrading of industries.

Second, strengthen insurance protection. Accelerate the formulation of opinions on the high-quality development of technology insurance, better play the role of risk sharing and compensation, support more major technological breakthroughs with insurance protection in the form of mutual insurance bodies, promote insurance products for emerging fields such as research and development robots and low-altitude aircraft, and effectively safeguard the innovative development of enterprises.

Third, expand equity investment. Encourage insurance funds to actively participate in venture capital according to market principles and orderly carry out major equity investments in unlisted technology companies. We support qualified national commercial banks in establishing financial asset investment companies, which will soon be approved one after another; today we will approve one to promote increased investment in technology innovation enterprises. Thank you.

Daily Economic News Reporter:

Just now, President Pan mentioned that the central bank launched two monetary policy tools to support the capital market in the fourth quarter of last year. Everyone is very concerned about what the central bank has done in the past six months. How do you evaluate the effectiveness of these tools? How will you improve the design of the tools in the next stage? Thank you.

Pan Gongsheng:

Last year, the People's Bank of China, together with the China Securities Regulatory Commission and the Financial Regulatory Bureau, created two tools to support the capital market. In September last year, I also announced this here. The initial quotas for these two capital market support tools were 500 billion yuan and 300 billion yuan, respectively, which met market demand, received widespread market welcome, and played an important role in boosting investor confidence, improving financial market expectations, and enhancing the inherent stability of the capital market.

These two tools are designed entirely according to market principles and provide important support for listed companies to manage their market value through stock repurchases and increases. The swap facility enhances the funding acquisition capacity of participants, and the repurchase and increase re-loan provides low-cost funds for commercial banks issuing related loans. The market participants of the two tools independently decide the timing and scale of stock purchases. Currently, the swap facility has conducted two operations with a total amount of 105 billion yuan; more than 500 listed companies and major shareholders have announced the use of loans to repurchase and increase stocks, with a total loan amount of about 300 billion yuan.

These two tools are embedded with counter-cyclical adjustment attributes and mainly play a bottom-line role. The logic and mechanism of their function are that when the capital market is significantly undervalued, securities institutions, listed companies, and major shareholders will have a stronger willingness to use the low-cost funds provided by the two tools to purchase stocks, thereby blocking the negative cycle of market weakness In November of last year, around the New Year this year, and in early April when the U.S. imposed tariffs, the usage of swap facilities significantly increased, and the repurchase and increase of shares by listed companies was also quite active. The inherent stabilization mechanism established by this has played a role in correcting the over-adjustment of the capital market and stabilizing market expectations through these two tools.

During the implementation of the policy, the People's Bank of China, together with the China Securities Regulatory Commission and the Financial Regulatory Administration, continuously summarized practical experiences. A topic I frequently discussed with Chairman Wu Qing was these two tools. We continuously optimized the policy elements of the tools based on suggestions from various parties to improve the efficiency of policy implementation.

First, the total quota of the two tools, which is 800 billion yuan, will be merged for use. Once the quota is connected, both tools can be utilized, which helps enhance the convenience and flexibility of the tools, better meeting the needs of different types of market entities.

Second, regarding swap facilities, the China Securities Regulatory Commission has expanded the range of participating institutions from the initial 20 brokerage firms and funds to a pool of 40 alternative institutions, and the range of collateral has been expanded to include Hong Kong stocks, restricted stocks, etc. Additionally, it has guided financial infrastructure to lower business fee standards.

Third, in terms of repurchase and increase of shares through relending, the maximum loan term has been extended from 1 year to 3 years, encouraging banks to issue credit loans. The requirement for listed companies to use their own funds for repurchasing and increasing shares has been reduced from 30% to 10%. At the same time, we have negotiated with the State-owned Assets Supervision and Administration Commission to include China Chengtong Holdings and China Reform Holdings, two state-owned capital operation platforms, into the support scope. Both companies have announced plans to use a total of 180 billion yuan of tool funds to increase their holdings in listed company stocks.

Furthermore, as Chairman Wu Qing just mentioned, China Investment Corporation is an important strategic force in maintaining the stability of the capital market. The People's Bank of China firmly supports China Investment Corporation in increasing its holdings in stock market index funds when necessary and provides it with sufficient relending support to resolutely maintain the stable operation of the capital market. Thank you.

Xinhua News Agency Financial Reporter:

I would like to ask Chairman Wu Qing. You just mentioned the "Action Plan for Promoting the High-Quality Development of Public Funds." What is the progress of this work? What impact will the implementation of the action plan have on the capital market? Thank you.

Wu Qing:

Thank you for your question. In the two press conferences in January and March this year, when discussing the progress of promoting medium- and long-term funds entering the market, I briefly introduced the basic ideas of public fund reform. Since the Central Political Bureau meeting on September 26 last year, the China Securities Regulatory Commission has implemented the decision to "steadily promote public fund reform," conducting more than 30 special research sessions, listening to opinions from various parties, including investors and institutions, focusing on the pain points and blockages commonly reflected by a wide range of investors, and has developed the "Action Plan for Promoting the High-Quality Development of Public Funds," which is now mature and will be released for implementation today. The basic ideas have already been introduced to everyone, and detailed information can be found on the website. The release of this reform measure coincides with the recent heated discussions in the investment community about Warren Buffett's farewell speech. Buffett is a highly respected investor, and he is set to retire this year. I believe the most important "lesson" we can learn from him is value investing, long-term investing, rational investing, and striving to return to investors; these fundamental concepts will not "retire." This is precisely what our reform aims to promote. This era is calling for new great investors, and we have a number of outstanding enterprises and entrepreneurs, and I believe we will also produce a group of excellent investors and investment institutions This requires some important rules to be put in place. The focus of this reform mainly highlights "several prominent aspects":

First, it emphasizes strengthening the binding of interests with investors. The key is to reform the fund operation model, urging the industry to return to the essence of "entrusted by others, managing finances for clients." Optimize the fee structure for actively managed equity funds, where those with poor performance must charge lower management fees. Through a floating management fee mechanism, it aims to reverse the phenomenon of fund companies ensuring profits regardless of performance. At the same time, indicators directly related to investors' interests, such as whether performance beats the benchmark and the investors' profit and loss situation, will be included in the assessment system for fund companies and fund managers, urging them to shift from "focusing on scale" to "focusing on returns." Additionally, increase the requirement for senior executives and fund managers to invest a proportion of their bonuses in their own products, and moderately extend the lock-up period, aligning the interests of these "key few" with those of investors.

Second, it emphasizes enhancing the stability of fund investment behavior. In response to issues such as "style drift" and "mismatched products," it requires setting clear performance benchmarks for each fund product, serving as a "ruler" to measure the product's true performance, avoiding deviations in investment behavior from the product's name and positioning, and ensuring that investors get what they see. At the same time, to forge a long-term investment advantage, a comprehensive incentive and constraint mechanism involving regulatory authorities, self-regulatory organizations, evaluation agencies, and the companies themselves will be established and improved, supervising fund companies to implement long-term assessments comprehensively, with a clear requirement that the weight of assessments over three years should not be less than 80%, reducing the phenomenon of fund managers "chasing highs and selling lows" and improving long-term product returns.

Third, it emphasizes enhancing the ability to serve investors. It guides fund companies and fund sales institutions to optimize resource allocation in investment research, product design, risk management, etc., to better serve investors. It will expedite the introduction of regulations for public fund investment advisors to promote standardized development and provide suitable asset allocation combinations for investors. At the same time, it will accelerate the launch of direct sales service platforms for institutional investors, facilitating various types of institutional investors to participate in fund investments.

Fourth, it emphasizes the work orientation of developing and expanding equity funds. Equity investment is key to the unique value that public funds can create for investors. Since September last year, the scale of equity funds has grown from 7 trillion yuan to 8.3 trillion yuan. In the next step, we will strengthen regulatory guidance, optimize the classification evaluation mechanism for fund companies and fund sales institutions, and promote increased issuance and sales of equity funds. We will actively promote product innovation, continuously enrich index funds and actively managed funds that align with national development directions and are more beneficial for creating long-term returns for investors. Based on the previously established rapid registration mechanism for stock ETFs within five working days, we will further significantly improve the registration efficiency for actively managed equity funds and other fund products that meet certain equity investment ratio requirements.

We believe that with the implementation of the reform plan, public funds will more prominently highlight the best interests of investors, and investors' sense of gain will further improve. Thank you!

Shou Xiaoli:

Please continue to ask questions. The press conference has been going on for nearly 85 minutes, and due to time constraints, this will be the last question.

Phoenix TV Reporter:

President Pan, at this year's Two Sessions press conference, you mentioned the innovative launch of the "Technology Board" in the bond market. What is the progress of this work? You just mentioned the establishment of risk-sharing tools for technology innovation bonds. What considerations are there? Thank you.

Pan Gongsheng:

Building a financial system that is compatible with technological innovation is an important focus for financial services to support the high-quality development of the real economy and is also a key aspect of deepening the structural reform of the financial supply side. In recent years, the People's Bank of China, together with relevant departments, has comprehensively utilized tools such as credit, bonds, equity, and insurance to continuously increase financial support for technological innovation, accomplishing a lot of work and accumulating some experience. Just now, Director Li Yunze and Chairman Wu Qing discussed many aspects of this.

Previously, the People's Bank of China, in conjunction with the China Securities Regulatory Commission, the Financial Regulatory Administration, the Ministry of Science and Technology, and other departments, actively prepared to launch the "Technology Board" in the bond market to support three types of market entities: financial institutions, technology enterprises, and equity investment institutions in issuing technology innovation bonds. At the same time, in light of the characteristics of technology enterprises and equity investment institutions, we have improved the institutional arrangements for the issuance and trading of technology innovation bonds, information disclosure, and credit rating, establishing a supporting rule system that aligns with the financing characteristics of technological innovation. Relevant policies and preparatory work are basically ready. Currently, the market response is very positive, with various types of financial institutions, technology enterprises, and equity investment institutions actively communicating with the People's Bank of China and the China Securities Regulatory Commission, expressing their willingness to issue technology innovation bonds. Preliminary statistics show that nearly 100 market institutions plan to issue over 300 billion yuan of technology innovation bonds, and it is expected that more institutions will participate in the future.

In addition, to support equity investment institutions in issuing long-term bonds on the "Technology Board," the People's Bank of China, in conjunction with the China Securities Regulatory Commission, has established a risk-sharing tool for technology innovation bonds, drawing on the experience of the 2018 private enterprise bond financing support tool. As we know, equity investment institutions play a key role in supporting technological innovation, especially in promoting capital formation. Statistics show that equity investment institutions have supported nearly 90% of the companies listed on the Sci-Tech Innovation Board and 60% of the companies listed on the ChiNext Board in China. However, equity investment institutions have issued relatively few bonds in the bond market, and issuing bonds using their own resources may have shorter terms and relatively higher costs.

The risk-sharing tool for technology innovation bonds, modeled after the 2018 private enterprise bond financing support tool, allows the People's Bank of China to provide low-cost re-lending funds to purchase technology innovation bonds. Together with local governments and market-oriented credit enhancement institutions, it adopts diversified credit enhancement measures to jointly share the default loss risk of bond investors, which can effectively reduce the bond issuance financing costs for equity investment institutions and support them in issuing longer-term bonds, such as 8-year and 10-year bonds.

In the early stages of policy formation, we invited several experts in equity investment and well-known private equity investment institutions to solicit their opinions in person. They provided many valuable policy suggestions and have high expectations for the introduction of this policy tool.

In summary, through specific policy arrangements such as the "Technology Board" in the bond market and risk-sharing tools, it is beneficial to further broaden the financing channels for technology enterprises and equity investment institutions, stimulate market vitality and confidence, attract more social capital into the field of technological innovation, and promote a mutually reinforcing and virtuous cycle between the private equity financing market and the stock issuance and trading market Thank you.

Shou Xiaoli:

Thank you to all the speakers and to all the journalist friends for your participation. The press conference ends here today, goodbye everyone!