central banks

China’s central bank warns against US, Western ‘suppression’

China’s central bank warns against US, Western ‘suppression’

CENTRAL BANK. Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, in Beijing, China, September 30, 2022.

Tingshu Wang/Reuters

The unusual statement from the People's Bank of China suggests Beijing may be signaling it is ready to deploy a wide range of countermeasures in response to increasing tension with the West

BEIJING, China – The People’s Bank of China (PBOC) said on Wednesday, March 15, it will “appropriately” respond to US and Western “containment and suppression,” in a rare warning by the central bank following calls by President Xi Jinping to safeguard national security.

It is unusual for the central bank to comment on foreign policy given its responsibility is finance, suggesting that China is signaling it is ready to deploy a wide range of countermeasures in response to increasing tension with the West.

The PBOC will “appropriately deal with the containment and suppression of the United States and the West,” the bank said in a statement published following an internal Communist Party committee study session.

Relations between the world’s two largest economies have been tense for years but worsened last month after the United States shot down a balloon off the US east coast that it says was a Chinese spying craft.

While the US has maintained it seeks to establish guardrails for the relationship, Xi has spoken of a need to “improve the national security system” and “build the people’s army into a great wall of steel that effectively safeguards national sovereignty, security, and development interests.”

China’s President Xi said on Wednesday that “frontrunners” should sincerely support other countries in their development, Chinese state media Xinhua reported.

“One will not be seen in a more favorable light after blowing out others’ lamps, nor will they go further by blocking others’ paths,” Xinhua quoted Xi as saying.

Xi made the remarks in a keynote address delivered at a meeting with world political parties.

He added that, in pursuit of modernization, China will neither tread the old path of colonization and plunder, nor the “crooked” path taken by some countries to seek hegemony once they grow strong, according to Xinhua.

‘External shocks and risks’

China last week announced sweeping government reform, including the establishment of a new financial regulatory body that would take over some supervisory functions from the PBOC.

The setting up of a national financial regulatory administration comes as Beijing seeks to rein in large corporate and financial institutions to shore up its economy in the face of “external shocks and risks,” as the foreign exchange regulator characterized the challenges facing the economy on Wednesday in a separate statement.

The anticipated shocks and challenges from outside would likely complicate policy-making this year as China emerges from three years of austere COVID-19 policies that have weighed on its $18-trillion economy.

The PBOC reiterated that it would step up financing for private, micro, and small enterprises and that it will support reasonable bond financing needs of private companies.

In recent years, the government has sought to tighten its grip on private businesses, by taking stakes in non-state enterprises or installing officials in large firms.

“We will precisely and effectively implement the prudent monetary policy, keep an appropriate pace of loan issuance, and keep the total supply of money and credit at an appropriate amount and grow steadily,” the bank said. – Rappler.com

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