On March 22, Pan Gongsheng, the Governor of the People's Bank of China, delivered a keynote speech at the 2026 China Development Forum.
Pan Gongsheng stated that the central bank will continue to implement a moderately accommodative monetary policy. It will comprehensively utilize various monetary policy tools such as the reserve requirement ratio, policy interest rates, and open market operations to maintain ample liquidity.
Regarding the RMB exchange rate, Pan Gongsheng mentioned that China has no need and no intention to gain trade competitive advantages through currency depreciation. The People's Bank of China's position has always been clear: it insists on the decisive role of the market in the formation of the exchange rate, maintains exchange rate flexibility, while strengthening expectation guidance to keep the RMB exchange rate basically stable at a reasonable and balanced level. The People's Bank's expectation guidance and the use of transparent, internationally compliant macro-prudential management tools help correct the market's &#34;herd effect&#34; and market failures, which is beneficial in preventing the destructive equilibria that have repeatedly occurred in international financial history.
The following is the full text of the speech:
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China's High-Quality Development and Global Economic Rebalancing — Keynote Speech by Pan Gongsheng, Governor of the People's Bank of China at the 2026 China Development Forum
Distinguished guests:
Hello everyone!
I am very pleased to participate in this China Development Forum. I sincerely thank friends from all walks of life for their continuous attention and support for China's financial sector. On this occasion, I would like to share three points of view on the theme of &#34;China's High-Quality Development and Global Economic Rebalancing.&#34;
1. Global Economic Rebalancing and China's Contribution
Currently, geopolitical conflicts and trade conflicts are frequent, and discussions about global economic imbalances and rebalancing have noticeably increased, becoming an important topic at this year's G20.
Since the beginning of this century, the global economy has undergone three rounds of important dynamic balancing processes, in which China has deeply participated and made positive contributions.
The first round was from 2001 to 2007 after China joined the WTO. China, leveraging its low-cost factor advantages, integrated into the global division of labor system, effectively expanded global supply, promoted production efficiency, alleviated global inflationary pressures, and facilitated global economic growth.
The second round was from 2008 to 2017 after the international financial crisis, during which global demand generally weakened, characterized by low growth, low inflation, low interest rates, and high debt. China took proactive measures, significantly expanding domestic demand and imports, playing a role in driving global economic growth and avoiding deflation. China's contribution to global growth has remained stable at around 30%, making it the main engine of world economic growth, continuing to this day.
The third round has been since the pandemic, with supply shocks and strong demand-side stimuli, coupled with the rise of trade protectionism and anti-globalization, leading to a period of high global inflation. China's supply chain system has remained stable, continuously contributing significantly to global price stability and economic balance.
China's economy itself has also undergone profound structural adjustments and dynamic balancing. The contribution rate of consumption to economic growth has risen from 37% in 2010 to 52% in 2025. The proportion of the current account surplus to GDP has decreased from about 10% in 2007 to a reasonable range of below 2% on average over the past decade
Here, I would like to briefly discuss two issues.
First, how to understand the sources of China's international industrial competitiveness.
The improvement of China's international industrial competitiveness is primarily attributed to over 40 years of reform and opening up. Through opening up, we have learned from international partners, including the outstanding international companies present today; we learn in competition and grow through learning. At the same time, the following four factors play a very important role in enhancing China's international industrial competitiveness.
Super-large market scale. The results of technological innovation can be easily industrialized, scaled, commercialized, and rapidly iterated, forming technological leadership and cost advantages.
Complete industrial chain and supply chain system. Industrial ecosystems, supply networks, research and development institutions, digital infrastructure, etc., are efficiently clustered and coordinated in some regions.
Rich, high-quality, skilled, and hardworking labor resources, especially technical talents. China has over 72 million high-skilled talents, and the total number of R&amp;D personnel has ranked first in the world for many years, making it the largest country in terms of talent resources with the most comprehensive categories.
Continuous R&amp;D investment leading to technological innovation capabilities. In the past five years, China's R&amp;D expenditure has grown by more than 10% annually. By 2025, China's total R&amp;D expenditure will be second only to the United States, ranking second globally; the intensity of R&amp;D investment (the proportion of R&amp;D investment to GDP) exceeds the average level of OECD countries.
Regarding the sources of China's international industrial competitiveness, some international perceptions still remain that it is due to unreasonable industrial subsidies provided by the Chinese government. If there are such doubts, one can walk around and see more in China, which will help to have a more accurate and comprehensive understanding of China's industry.
As Premier Li Qiang emphasized in his earlier speech, China advocates fair, benign, and healthy competition. In response to the &#34;involution&#34; competition of some enterprises, the central government has taken measures to regulate local governments' investment promotion behaviors, prohibiting unreasonable preferential policies such as tax and land use, and building a unified national market. Strictly implement industrial, environmental, and other technical standards to constrain low-level competition. At the same time, the People's Bank of China guides financial institutions to scientifically assess risks, suppressing financing for industries involved in &#34;involution&#34; competition from a financial perspective.
These efforts have already achieved relatively good results. The decline in China's Producer Price Index (PPI) has narrowed from -3.6% in July last year to -0.9% in February this year, and the operating conditions of enterprises have also improved.
Second, how to view and analyze the issue of global economic imbalance.
This issue is also a topic of considerable discussion internationally at present, and I would like to share my views on it.
When analyzing global economic imbalances, it is essential to look not only at goods trade but also at service trade; not only at the current account but also at the financial account. China is the largest goods trade surplus country and also the largest service trade deficit country. The current account surplus accumulated by China is allocated to different regions and industries globally through foreign investments by enterprises and banks, injecting liquidity into the global financial market and strongly supporting global economic development and financial stability
Not only should we analyze from a static perspective, but also from a dynamic perspective. From a temporal dimension, supply and demand balance is a relative concept. Whether on a global scale or within a single economy, the expansion and contraction of the supply-demand gap will be affected by various factors. For example, recent conflicts in the Middle East have caused supply-side shocks to oil, leading to a sharp rise in oil prices. However, over a longer cycle, market forces will self-adjust to achieve dynamic equilibrium of supply and demand. Economic development, income growth, changes in consumer preferences, and technological advancements create new supply and demand forms, generating new markets.
From a spatial dimension, whether between countries or among different regions within a country, constructing a unified large market and engaging in division of labor and trade based on comparative advantages can maximize overall welfare. Reflecting on the consensus in the global economics community during the 1980s and 1990s, when I was studying economics at university, it was widely accepted that a free trade system based on comparative advantages is the foundation of global prosperity and contributes to enhancing global welfare. International trade is not coercive; it is the result of voluntary choices made by billions of enterprises and households.
We must not only focus on economic factors but also on non-economic factors. Last year's tariff and trade wars triggered &#34;export rush,&#34; and the broadening concept of national security led to an increase in export control measures. These factors disrupted the expectations of enterprises and households, causing significant disturbances to global economic balance.
We must analyze not only the international economic and trade system but also the international monetary system. Trade surpluses are the result of the evolution of the global industrial division of labor. Over the past forty years, the main surplus countries have generally been those with strong manufacturing competitiveness, such as Japan, Germany, Switzerland, and China, which have gradually shifted to some emerging market economies in Southeast Asia in recent years; however, the main deficit countries have remained unchanged, which is related to the inherent flaws of the international monetary system.
In a single sovereign currency-dominated international monetary system, the main reserve currency issuing countries can implement deficit financing at a lower cost over the long term, exporting currency through significant current account deficits. At the same time, due to continuous capital inflows, this objectively leads to an overvaluation of the main reserve currency, which can weaken the manufacturing competitiveness of that country to some extent.
Currently, stable, rational, and predictable cooperation is particularly precious. Trade fragmentation is undermining the foundation of free trade. We need to more firmly oppose all forms of trade protectionism, consolidate and develop a multilateral framework and international economic and trade order centered on the World Trade Organization and based on rules, and promote inclusive and equitable economic globalization.
II. China is actively promoting the transformation of its economic growth model to enhance growth quality and sustainability.
The recently concluded Two Sessions in China reviewed and approved the 2026 government work report and the 14th Five-Year Plan outline, clarifying the economic and social development goals and main policies for this year and the next five years. There are five characteristics that need special attention.
First, the economic growth expectation target has been set scientifically and reasonably. From a mathematical relationship, the economic growth rate is the ratio of annual GDP increment to total GDP. By 2025, China's total GDP will exceed 140 trillion yuan, with each year's increment equivalent to the total economic output of a medium-sized economy
China needs to maintain a reasonable economic growth rate, but the quality and sustainability of growth are more important. The government work report sets this year's economic growth target at 4.5%-5%, allowing for greater space for economic structural adjustment and high-quality development.
Second, focus on transforming the way of economic growth. The 14th Five-Year Plan focuses on high-quality development, strengthening the domestic circulation, and adhering to domestic demand as the main driver. Implement policies and measures to boost consumption, improve the income distribution system, optimize the social security system, and expand investment and consumption in education, healthcare, and elderly care, significantly increasing the resident consumption rate. Vigorously develop the service industry, promoting reform, innovation, and open cooperation in the service sector. China will accelerate its transformation into a core market for global demand based on its status as a major global manufacturing country.
Third, emphasize technological innovation to drive productivity growth. Technological innovation is China's clear and firm long-term strategic choice, aligning with global technological revolution trends and meeting the requirements for China's high-quality development. China will continue to promote the deep integration of technological and industrial innovation, strengthen intellectual property protection and application, and enhance productivity.
Fourth, accelerate green transformation and sustainable development. China has built the world's largest renewable energy system and the most complete new energy industry chain, significantly reducing global wind and photovoltaic power generation costs. China will continue to vigorously develop a green low-carbon economy, striving to achieve carbon peak before 2030 and carbon neutrality before 2060, maintaining the multilateral climate process, and contributing to global green low-carbon development.
Fifth, further improve economic governance methods. Scientifically grasp and balance the boundaries between government and market, respecting and leveraging the decisive role of the market in resource allocation. Promote the construction of a unified national market, create a good legal and economic environment, and foster a fairer and more dynamic market environment.
The dynamic balance of the economy and structural transformation require medium- and long-term reform plans and commitments, which must be firmly executed, rather than flip-flopping. This year, China will implement the 14th Five-Year Plan. Scientifically formulating and continuously implementing five-year plans is an important experience in China's reform and development and a significant institutional advantage.
III. Increase financial support for China's economic structural transformation
The People's Bank of China will maintain a supportive monetary policy stance to create a favorable monetary and financial environment for stable economic growth, high-quality development, and smooth operation of financial markets.
We will continue to implement a moderately loose monetary policy. Currently, China's social financing conditions are in a loose state, with reasonable growth in the total amount of finance. We will balance the relationship between short-term and long-term, supporting the growth of the real economy while maintaining the health of the financial system, and between internal and external balance, comprehensively using various monetary policy tools such as reserve requirement ratios, policy interest rates, and open market operations to maintain ample liquidity.
According to the classification standards of the International Monetary Fund, China implements a managed floating exchange rate system. Since the beginning of this year, the RMB has appreciated approximately 1.3% against the US dollar, 3.7% against the euro, 3.2% against the Japanese yen, and 2.4% against the British pound
China has no need and no intention to gain a trade competitive advantage through currency depreciation. The People's Bank of China's position has always been clear: to adhere to the decisive role of the market in the formation of the exchange rate, maintain exchange rate flexibility, strengthen expectation guidance, and keep the RMB exchange rate basically stable at a reasonable and balanced level. The People's Bank's expectation guidance and the use of transparent, internationally compliant macro-prudential management tools help correct the market's &#34;herd effect&#34; and market failures, which is conducive to preventing the destructive equilibria that have repeatedly occurred in international financial history.
We will steadily promote high-level opening up of the financial sector. We will deepen the interconnectedness of financial markets and cross-border payment systems, facilitating more investors to invest in the Chinese financial market. China's stock and bond markets rank second in the world, with continuous improvements in market depth, resilience, and liquidity. By the end of 2025, foreign institutions and individuals will hold more than 10 trillion yuan in domestic stocks, bonds, deposits, and loans. We welcome foreign investors to participate in and invest in the Chinese financial market.
In recent years, the internationalization of the RMB has made positive progress, providing more diversified currency options for domestic and foreign entities. Currently, the financing cost of RMB is relatively low. By 2025, governments of multiple countries, international development institutions, financial institutions, and large enterprises will issue panda bonds exceeding 170 billion yuan, with a larger scale of offshore RMB bonds issued in Hong Kong. We will continue to improve the institutional arrangements for the cross-border use of RMB and the construction of financial infrastructure. We will carry out diversified monetary and financial cooperation, promote the development of the offshore RMB market, and facilitate cross-border trade and investment activities.
We will implement the global governance initiative proposed by General Secretary Xi Jinping and actively participate in and promote the reform and improvement of global financial governance. We will strengthen international macroeconomic policy communication and coordination, improve the governance of international financial organizations, and build a diverse and efficient global financial safety net to more effectively maintain global economic and financial stability.
Dear guests, in the context of rising global uncertainty, China will continue to play an important role as a main engine of world economic growth with responsibility and courage, bringing strong growth momentum and stability to the world, and working with all parties to promote the global economy towards a more open, inclusive, and balanced direction.
Thank you all!
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Source: People's Bank of China

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Pan Gongsheng stated that the moderately accommodative monetary policy will continue to be implemented. A comprehensive use of various monetary policy tools such as the reserve requirement ratio, policy interest rates, and open market operations will be employed to maintain ample liquidity

- On March 22, 2026, People's Bank of China President Pan Gongsheng delivered a keynote speech at the China Development Forum, emphasizing a continued moderately loose monetary policy using various tools to ensure ample liquidity.  
- He stated that China does not intend to devalue the Yuan for trade competitiveness, reinforcing the market's decisive role in exchange rate formation and striving for stability at a reasonable level.  
- The speech highlighted China's contributions to global economic rebalancing and its commitment to high-quality development through structural transformation and increased financial support for the economy.

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Central Bank Governor Pan Gongsheng: Continue to implement a moderately accommodative monetary policy and use various tools to maintain ample liquidity