The central bank explicitly stated it will intensify countercyclical adjustments in the second half of the year; the bond market's 'Sci-Tech Board' has issued over RMB 2.8 trillion in total

On August 1, the People's Bank of China convened its second-half 2026 work conference to review the first half’s performance and outline key tasks for the next phase. The meeting made clear that it would properly implement a moderately accommodative monetary policy, comprehensively deploy and timely adjust monetary policy tools, maintain ample liquidity, strengthen countercyclical adjustments, and drive sustained, high-quality economic growth.

The meeting noted that since the beginning of this year, financial services have improved in both quality and efficiency in key and vulnerable sectors. By the end of June, loans under the five major financial initiatives grew by 11% year-on-year, significantly outpacing overall loan growth. The bond market’s 'Sci-Tech Board' has cumulatively issued over RMB 2.8 trillion in sci-tech innovation bonds, providing strong funding support to innovation-driven enterprises.

Targeted use of structural policy tools to alleviate financing difficulties

To enhance the quality and effectiveness of financial services for the real economy, the meeting emphasized the proper use of various structural monetary policy tools, strengthening coordination with local fiscal and industrial authorities to amplify policy incentives. It also called for high-quality development of a 'science and technology board' in the bond market, prudent implementation of risk-sharing instruments for bonds issued by sci-tech innovation and private enterprises, and exploration of open data sharing and integrated data applications in the field of tech finance.

To address financing challenges faced by private and small- and medium-sized enterprises (SMEs), the People’s Bank of China (PBOC) proposed improving credit enhancement mechanisms for private SMEs and enhancing financial service capabilities for SMEs. Previously, the PBOC had already lowered interest rates on structural monetary policy tools and increased quotas for relending programs supporting sci-tech innovation, technological upgrading, agriculture, and SMEs, while establishing a dedicated relending facility for private enterprises.

Prudently defuse risks in key sectors

On preventing and resolving financial risks in key areas, the PBOC stated it will continue providing financial support for local government financing vehicle (LGFV) debt risk resolution and promote market-oriented transformation of LGFVs. It will also effectively leverage two monetary policy instruments supporting capital markets to stabilize and bolster market confidence.

In terms of financial regulation, the PBOC will take the lead in standardizing online marketing practices for financial products, strengthen law enforcement in financial markets, and rigorously crack down on illegal and non-compliant activities.

Advance high-standard financial opening-up

On opening up, the PBOC proposed supporting and facilitating greater participation by overseas institutions in panda bond issuance. Panda bond issuance in the first half of the year has already exceeded RMB 160 billion. The PBOC also pledged support for Shanghai to enhance its cross-border and offshore financial service capabilities and to reinforce Hong Kong’s role as an offshore RMB business hub.

The PBOC will also advance the development of the Cross-Border Interbank Payment System (CIPS), intensify international cooperation on cross-border payments, and improve cross-border infrastructure for digital RMB. Additionally, it will optimize policies on corporate overseas lending, banks’ foreign-currency loans, and cross-border RMB interbank financing, and introduce a new repurchase facility for foreign central banks.

The meeting also noted that revisions to the People’s Bank of China Law have achieved significant progress and that the PBOC’s 15th Five-Year Plan will be released soon. On financial service management, the PBOC will continuously and sustainably optimize payment services, deepen precise governance of illicit fund flows linked to fraud and gambling, promote AI applications in finance, and enhance capabilities in financial cybersecurity and data security governance.

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