The Chinese authorities are doing everything in their power to avoid doing what they must do as the tanks of the economy. The PBOC:

Covid Related Policies

  • A promise to use monetary policy tools to provide sufficient liquidity, guide banks to expand lending extension and transfer profits to the real economy appropriately
  • A commitment to expand the lending quota for small businesses and agricultural businesses, and guide banks to increase support for industries suffering a temporary business hit, including catering, hospitality, retail retail and tourism
  • The central bank will reward banks with funds equivalent to 1% of their newly increased loans for small and micro businesses until mid-2023, and renew an existing loan quota of 400 billion yuan ($62.8 billion). dollars) for inclusive finance
  • Banks should defer mortgage payments or extend mortgages for people in Covid-related quarantine, as well as those who have temporarily lost income due to the pandemic; banks should also provide more business loans to workers with “flexible employment”, such as taxi drivers, online store owners and truck drivers

Financial aid

  • A promise to increase credit support for spring planting, as well as grain storage and processing and production of major crops, such as soybeans
  • The central bank will use its on-lending program to support safe coal generation and respond to demand from power generation companies to purchase and store coal, to ensure stable energy supply
  • It will support banks’ ability to provide loans to logistics companies and truck drivers, and allow them to provide emergency loans to support airlines and airports.
  • Through the loan program, the central bank will guide banks to support business research and development
  • Political banks should step up their financial support for large investment projects, and all banks should proactively seek out projects, including those focused on “new infrastructure,” such as data centers. Banks should also buy government bonds to support infrastructure investments at the beginning of the period and meet the reasonable needs of local government financing vehicles.
  • The central bank will encourage banks to establish long-term partnerships with private companies and increase their share of new loans to companies
  • Cities should establish differentiated mortgage policies and set appropriate down payment and mortgage rate requirements; banks, meanwhile, should increase their support for quality real estate projects and lend more to construction companies
  • Fintech companies expected to cut fees and interest rates
  • The central bank will increase financial support to sectors such as elderly care and tourism, as well as green energy and rural sectors


  • Central bank to test more convenient yuan regulations in trade, investment
  • It will be easier for companies to borrow abroad
  • It will encourage companies to use more yuan to settle cross-border trade and improve foreign exchange derivatives so that companies can better prevent risks.
  • It will further digitize cross-border banking settlement and payment services
  • It will strengthen insurance support for small exporters and importers
  • It will improve procedures and standards to facilitate foreign investors’ investment in China’s securities markets.

Other measures

  • The central bank will strengthen the leadership role of the Communist Party in implementing the policy
  • Banks should make autonomous decisions and assume their own risks; the central bank will also guide banks and companies to prevent moral hazard and strengthen compliance

Ongoing policies

  • Central bank to speed up bond issuance for pandemic-affected companies by simplifying procedures and reasonably relaxing information disclosure requirements
  • It will ensure the supply of cash, as well as the operation of a digital payment system; banks can approve loans remotely via videoconference; the central bank will also ensure that tax refunds are paid to companies.

None of this matters enough while OMICRON travels to other cities. Societe Generale:

Unsurprisingly, China’s first-quarter GDP growth and March activity data surprised on the upside. The data report may or may not capture the true degree of loss in growth momentum through the end of March. But, like the National Bureau of Statistics, we are revising our forecast for annual GDP growth upwards from 4.3% to 5% for 2022.