Major press conference: A reduction in the reserve requirement ratio and interest rates has arrived!

At 9 a.m. today, the State Council Information Office will hold a press conference, inviting officials from the People's Bank of China, the State Financial Supervision Administration, and the China Securities Regulatory Commission to introduce the "Package of Financial Policies to Support Market Stability and Expectations."

At the meeting, Pan Gongsheng, Governor of the People's Bank of China, also announced a reserve requirement and interest rate cut, lowering the financial institutions' deposit reserve ratio by 0.5 percentage points and the policy interest rate by 0.1 percentage points, reducing it from the current 1.5% to 1.4%, while also lowering the housing provident fund interest rate by 0.25 percentage points.

Li Yunze, head of the Financial Regulatory Bureau, stated that a package of policies supporting small and micro enterprises, as well as private enterprises' financing, will be introduced as soon as possible, enhancing the financing coordination work mechanism to help stabilize enterprises and the economy. Policies will be developed and implemented to support the development of foreign trade in the banking and insurance sectors, providing precise services to 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 light rain or a storm, no matter if the waves are high or the sea is turbulent, we are confident, capable, and have the conditions to achieve the stable and healthy development of China's stock market.

Reserve requirement and interest rate cuts, the personal provident fund loan interest rate is lowered.

Pan Gongsheng, Governor of the People's Bank of China, stated at a press conference that the financial institutions' deposit reserve ratio will be lowered by 0.5 percentage points, with an expected provision of approximately 1 trillion long-term liquidity to the market; improvements to the deposit reserve system will see a phased reduction of the deposit reserve ratio for auto finance companies and financial leasing companies from the current 5% to 0%.

Support high-quality Chinese concept stocks to return to the domestic and Hong Kong markets.

Wu Qing stated at the press conference that the foreign investment holding in the A-shares circulation market remains stable at around 3 trillion yuan; the China Securities Regulatory Commission will unswervingly promote a high level of openness in the capital markets; strengthen bilateral and multilateral cross-border regulatory cooperation, shaping a stable, transparent, and predictable regulatory environment, protecting enterprises' legitimate interests in overseas markets, and supporting quality Chinese concept stocks to return to the domestic and Hong Kong markets.

Incorporate the performance of outpacing the benchmark into the assessment system for fund companies and fund managers.

Wu Qing stated at the press conference that the China Securities Regulatory Commission would release the "Action Plan for Promoting the High-Quality Development of Public Funds" on the same day. He introduced that the reform emphasizes strengthening the alignment of interests between public funds and investors, optimizing the fee structure for actively managed equity funds, and requiring those with poor performance to charge less management fees. Through a floating management fee collection mechanism, it aims to reverse the situation where fund companies benefit regardless of performance. At the same time, indicators directly related to investors' interests, such as performance relative to the benchmark and investor gains and losses, will be incorporated into the assessment system for fund companies and managers, urging them to shift from "emphasizing scale" to "emphasizing returns."

The following is the full transcript of the press conference:

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

Ladies and gentlemen, good morning! Welcome to the press conference of the State Council Information Office. Today, we invite Mr. Pan Gongsheng, President 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 Financial Policies to Support Market Stability and Expectations" and answer questions of interest.

Next, let's invite Mr. Pan Gongsheng to begin.

Mr. Pan Gongsheng, President of the People's Bank of China:

Good morning, dear journalist friends! It is a pleasure to meet you all again. Thank you for your continuous 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, executed a suitably loose monetary policy, strengthened counter-cyclical adjustments, comprehensively utilized various monetary policy tools, served the high-quality development of the real economy, and created a favorable monetary and financial environment for promoting sustained economic recovery.

From the results, various macro-financial data since the beginning of this year have been quite good, with monetary credit showing operating characteristics of "increasing quantity, decreasing price, and optimizing structure." At the end of the first quarter, the social financing scale grew by 8.4% year-on-year, and loans increased by 7.4% year-on-year (if the impact of replacing local special bonds with loans from local financing platforms is factored out, the year-on-year growth rate of loans will exceed 8%). The broad money supply (M2) maintained stable growth of around 7%, significantly higher than the nominal economic growth rate. At the same time, social financing costs remained low, with loan growth rates for inclusive small and micro, medium- to long-term for manufacturing, and technology-oriented SMEs 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 SSE Composite Index remained around 3300 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 resilient, and the financial market has shown strong resilience. The SSE Composite Index quickly rebounded and stabilized after a drop on April 7, and the yield on 10-year government bonds hovered around 1.65%. After a slight depreciation, the RMB against the US dollar has risen back to around 7.2 yuan.

Currently, the global economy is full of uncertainties, with economic fragmentation and escalating trade tensions disrupting global industry and supply chains, causing fluctuations in international financial markets, and weakening the momentum for global economic growth. Not long ago, participation in the spring meeting of the IMF and World Bank in Washington revealed deep concerns from central bank governors and heads of international financial organizations. The People's Bank will earnestly implement the Central government's decision-making and deployment, promote high-quality economic development, firmly 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 openness and security, explore expanding the functions of the central bank in macro-prudential and financial stability, and maintain the stable operation of China's exchange market, bond market, stock market, and other financial markets.

On April 25, 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 execute a suitably loose monetary policy, the People's Bank will enhance the intensity of macro-control and launch a package of monetary policy measures, mainly consisting of three categories with a total of ten measures.

First is quantitative policies, through measures such as reducing the reserve requirement ratio, to increase the supply of medium- to long-term liquidity and maintain ample market liquidity. Second is price-based policies, adjusting policy interest rates and lowering the rates of structural monetary policy tools, which refers to the interest rates at which the central bank provides relending to commercial banks, while also lowering the provident fund loan interest rates. Third is structural policies, improving existing structural monetary policy tools and creating new policy tools to support technological innovation, expand consumption, and promote inclusive finance.

These three types of measures include ten specific policies:

First, the reserve requirement ratio will be lowered by 0.5 percentage points, which is expected to provide the market with long-term liquidity of approximately 1 trillion yuan.

Second, the reserve requirement system will be improved, with the reserve requirement ratio for auto finance companies and financial leasing companies being reduced from the current 5% to 0% in stages.

Third, the policy interest rate will be lowered 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 lead to a simultaneous decline in the Loan Prime Rate (LPR) of about 0.1 percentage points.

Fourth, the rates of structural monetary policy tools will be lowered by 0.25 percentage points, including various special structural tool rates and the re-lending 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 re-lending funds to commercial banks. The rate for pledged supplementary lending (PSL) will be decreased from the current 2.25% to 2%. Pledged supplementary lending is a tool through which the central bank provides funds to policy banks.

Fifth, the interest rate for personal housing provident fund loans will be lowered by 0.25 percentage points, with the rate for first-time home buyers with a term of over five years reduced from 2.85% to 2.6%, and other term rates adjusted accordingly.

Sixth, the quota for re-lending for technological innovation and technical transformation will increase by 300 billion yuan, from the current 500 billion yuan to 800 billion yuan. This re-lending tool already exists, and this time the quota will increase by 300 billion yuan, bringing the total quota to 800 billion yuan, continuously supporting the implementation of the 'Two New' policy, which involves large-scale equipment upgrades and replacing old consumer goods with new ones, referred to as 'Two New'.

Seventh, a 500 billion yuan 'service consumption and retirement re-lending' will be established to guide commercial banks in increasing their credit support for service consumption and retirement.

Eighth, the quota for re-lending to support agriculture and small enterprises will increase by 300 billion yuan, creating a synergistic effect with the policy of lowering re-lending rates to support banks in expanding their loan issuance to agricultural, small, and private enterprises.

Ninth, optimize two monetary policy tools that support the capital markets, merging the use of 500 billion yuan for securities fund insurance company swap facilities and 300 billion yuan for Share Buyback loans, with a total limit of 800 billion yuan.

Tenth, establish a risk-sharing tool for technology innovation bonds, with the central bank providing low-cost refinancing funds to purchase technology innovation bonds. This will involve collaboration with local governments and market-oriented credit enhancement institutions to share part of the default loss risks through diversified credit enhancement measures, supporting the issuance of low-cost, long-term innovation bonds for technology innovation enterprises and private equity institutions.

The three major categories mentioned above include ten specific policy measures, which we will gradually disclose and implement on the People's Bank website. Next, the People's Bank will continue to earnestly implement the various deployments of the Central Committee of the Communist Party and the State Council, carry out moderately loose monetary policy, and continually adjust monetary policy according to domestic and international economic and financial situations as well as the operation of financial markets. Furthermore, it will strengthen coordination with fiscal policy to promote high-quality economic development.

Thank you!

Shou Xiaoli:

Thank you, President Pan, for the introduction. Next, please welcome Mr. Li Yunze for his introduction.

Director of the Financial Regulatory Administration, Li Yunze:

Dear media friends, good morning. It's a pleasure to meet everyone again and answer your questions. First, on behalf of the Financial Regulatory Administration, I would like to express my heartfelt gratitude to all media friends for your long-term concern and support for the work of financial regulation!

Since the beginning of this year, the Financial Regulatory Bureau has resolutely implemented the decisions and deployments of the Party Central Committee and the State Council, earnestly carried out the spirit of the Central Politburo meeting on April 25, strengthened bottom-line thinking, increased policy measures, actively responded to external shocks, and solidly advanced various tasks including risk prevention, strengthened regulation, and promoted development.

First, the overall financial operation is stable. Currently, the various businesses of Banks and Insurance institutions are being carried out in an orderly manner, and the main regulatory indicators are within a healthy Range. The foundation of large financial institutions is solid, and their role as a "ballast" is evident. The reform of small and medium-sized financial institutions has achieved important phased results. In the first four months, the capital adequacy ratio of banks and the solvency adequacy ratio of insurance maintained a steady upward trend, with the non-performing loan ratio decreasing by about 0.1 percentage points year-on-year, and the provision coverage ratio increasing 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 continue to manifest. We strengthen regulatory guidance, accelerate the improvement of regulatory systems, and revise and issue more than 30 various systems such as corporate governance, regulatory ratings, and consumer protection. Development opinions for high-quality development in the banking, insurance, and asset management sectors were formulated to enhance specialized and differentiated development capabilities. We guide the industry to promote cost reductions and efficiency improvements in depth, further solidifying the foundation for sustainable development. The capital replenishment mechanism is being improved, with large commercial banks accelerating capital replenishment work, and capital replenishment for large insurance groups already on the agenda, while various regions are also orderly supplementing capital for 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 developed special implementation plans for Technology, green initiatives, Retirement, and inclusive finance, and introduced multiple financial policies supporting Consumption and foreign trade, intensifying support in the "Two Heavy" and "Two New" fields and strengthening livelihood security. In the first four months, the banking and insurance sectors provided about 17 trillion yuan in new financing for the real economy through loans, bonds, and various other means. Since the expansion of the no-repayment rollover policy last September, approximately 4.4 trillion yuan has been rolled over for small and micro enterprises, better meeting their refinancing needs. The underwriting amount of short-term export credit insurance increased by 15.3% year-on-year, providing strong support for stabilizing foreign trade. From January to April this year, the insurance industry paid about 1 trillion yuan in claims, with insurance coverage for Electric Vehicles exceeding 10 million vehicles. Meanwhile, the long-term reserves accumulated for Retirement and health insurance protection for the public have surpassed 10 trillion yuan.

Next, we will further enhance our sense of responsibility, urgency, and initiative in implementing the requirements of the Party Central Committee and the State Council, vigorously promote the effective implementation of established policies, 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 that align with the new model of Real Estate development to help continuously consolidate the stabilization of the real estate market.

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

Thirdly, adjust and optimize regulatory rules, further lower the risk indicators for stock investments by insurance companies, and support the stability and activity of the Capital Markets.

Fourth, quickly introduce a package of policies to support financing for small and micro enterprises and private enterprises, establish a deep and practical financing coordination work mechanism, and assist in stabilizing enterprises and the economy.

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

Sixthly, revise and issue management measures for merger and acquisition loans to promote the industry's acceleration of transformation and upgrading.

Seventh, expand the establishment of financial asset investment companies to include qualified national commercial banks, and increase investment in technology enterprises.

Eighth, formulate high-quality development opinions on technology insurance to better play a role in risk sharing and compensation, effectively providing strong support for technological innovation.

Thank you.

Shou Xiaoli:

Thank you, Director Li Yunze, for the introduction. Next, please Mr. Wu Qing to give an introduction.

Chairman of the China Securities Regulatory Commission, Wu Qing:

Ladies and gentlemen, esteemed media friends, good morning! First, thank you for your longstanding concern and support for the capital markets and the work of the Regulatory Commission! Since the beginning of this year, the Regulatory Commission has been deeply implementing a series of decision-making deployments from the Central Committee of the Party and the State Council, continuously promoting the new 'National Nine Articles' and a series of policy documents to achieve tangible results. The overall operation of the market has been stable and improving. Since early April, the U.S. government's tariff policy has severely impacted the international economic and trade order, leading to significant turbulence in the international financial market, which has also put great pressure on the domestic capital market. In the face of this sudden and severe challenge, under the strong leadership of the Party Central Committee and the State Council, and under the coordination of the Central Financial Office, the Regulatory Commission, in conjunction with relevant departments, has acted swiftly, rolling out a package of 'combinations' to stabilize the market from aspects such as policy hedging, capital hedging, and expectation hedging. This includes powerful policy signals released by the People's Bank of China, the Financial Regulatory Bureau, the State-owned Assets Supervision and Administration Commission, and the Foreign Exchange Administration. The Central Huijin Investment has taken decisive action, and the national social security fund, securities fund institutions, bank and insurance institutions, and various investors have shown confidence and actively invested, with many listed companies adopting various ways such as share buybacks to maintain stock price stability. The saying goes, 'When everyone contributes, the flame rises high; facing the wind and rain, we can steady the waves.' Thanks to the joint efforts of a wide range of investors and market participants, the A-share market has experienced significant fluctuations initially, which lasted only a day, and has since rebounded and stabilized, demonstrating strong resilience and risk resistance.

On April 25, the Central Political Bureau meeting emphasized the need to 'continue to stabilize and activate capital markets,' fully reflecting the Central Committee's great emphasis and eager expectations for stabilizing the market and expectations. We will do our utmost to implement it, adhering to 'two strengths and two stricts', resolutely managing our own affairs, striving to reflect 'stability' in market operations while enhancing 'progress' in stimulating market vitality and strengthening market functions.

First, consolidate the momentum for market stabilization and improvement. Strengthen market monitoring and comprehensive risk assessment, dynamically improve the response plans for various external risks, and fully support Central Huijin Investment in playing a 'stabilization fund' role. With strong operations from Central Huijin Investment at the front, and the People's Bank of China as a backup, this is one of the most powerful and effective models in the world. Collaborate with the People's Bank of China to establish a long-term mechanism for monetary policy tools that support capital markets, better playing the stabilizing functions of all market participants.

Second, highlight services for the development of new productive forces as a key focus. Focus on several important actions: First, policies to deepen the reform of the Star and GEM boards will be introduced soon, with opportunities announced to further enhance the system’s inclusiveness and adaptability in terms of market hierarchy, review mechanisms, and investor protection, while promoting typical cases to be implemented as soon as possible. Second, the newly revised 'Management Measures for Major Asset Restructuring of Listed Companies' and relevant regulatory guidelines will be issued promptly, better serving the capital market's main channel for mergers and acquisitions. Third, vigorously develop science and technology innovation bonds, optimize the issuance registration process, and improve credit enhancement support, providing comprehensive and 'relay' financial services for technology innovation companies.

Third, actively promote the entry of medium- and long-term funds into the market. While guiding listed companies to improve governance and performance, continuously enhance investor returns, and make greater efforts to 'attract long-term money', collaborate with various parties to continue increasing the scale and proportion of medium- and long-term funds entering the market. Expedite the release and implementation of the 'Action Plan for Promoting High-Quality Development of Public Funds', which is published today, and better reflect the mutual development and success of fund managers and investors, striving to form a virtuous cycle of 'returns increasing - funds entering - market stabilizing'.

Stability in the stock market is crucial for the overall economic and social landscape and the vital interests of billions of investors. Currently, the trend of economic stabilization and improvement in China is continuously solidifying, with relevant parties being well-prepared for policy responses to external shocks, which not only injects more certainty into a world economy full of uncertainties but also creates a solid foundation and conditions for the stable operation of China's capital markets. Our confidence and assurance regarding the capital market mainly come from four aspects: First, the strong leadership of the Central Committee of the Party and the State Council, coupled with their firm determination and effective deployment to maintain market stability. These are all substantial actions and have yielded real effects. Second, the implementation of the capital market '1+N' policy system is driving positive and profound changes in the internal structure of the market, accelerating the formation of an ecological market for coordinated investment and financing. Third, the 'technology narrative' logic in the A-share market is becoming increasingly clear, with clustering effects becoming more pronounced. The immense 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 fresh streams for the capital markets. Fourth, the valuation level of the A-share market is generally considered to be relatively low. The PE of the CSI 300 Index is only 12.3, and the PEs of the main domestic market indices are significantly lower than those of the S&P 500 and other major global indices. Under the circumstances of increased instability in global markets, the value of asset allocation in China and its attractiveness continues to rise. In simple terms, we have reliable economic development, trustworthy macro policies, and dependable institutional guarantees, which inject more certainty into our economy and capital markets in an uncertain environment.

In conclusion, facing the path ahead which includes both wind and rain is normal; whether confronted with light winds and drizzles or strong gales and downpours, whether facing high winds and waves or turbulent seas, we are fully in conditions, confident, and capable of achieving stable and healthy development of China's stock market. Thank you!

Shou Xiaoli:

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

CCTV reporter from the Central Broadcasting - TV Station:

Earlier, Director Pan mentioned that there will be a reduction in the reserve requirement ratio and policy interest rate, which has attracted a lot of attention. Could you please provide more details? Thank you.

Pan Gongsheng:

Thank you for your question. Adjustments to monetary policy measures, such as policy interest rates and reserve requirement ratio, are of great concern to everyone. The Central Economic Work Conference in December last year and this year's Government Work Report both clearly stated that this year, a moderately loose monetary policy will be implemented, including timely reserve requirement and interest rate cuts. The main connotations of a moderately loose monetary policy are: First, ample liquidity with relatively relaxed social financing conditions, including reasonable growth in social financing scale and broad money supply, and relatively low comprehensive financing costs. Second, the implementation of the policy requires discretion based on a comprehensive evaluation of domestic and foreign economic and financial conditions and the operation of the financial market, using various monetary policy tools for dynamic adjustments. Third, the orientation of monetary policy is a description of the state; in recent years, the People's Bank has continuously reduced the reserve requirement and interest rates, indicating a supportive and relatively loose monetary policy stance.

Earlier, I announced several adjustments to the total monetary policy measures, which I will elaborate on here.

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

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 central bank's 7-day reverse repurchase operation rate in its policy system, which is currently at 1.5%, lowered to 1.4% this time. After market-based interest rate transmission, it is expected to drive down the Loan Market Quotation Rate (LPR) by 0.1 percentage points as well. At the same time, we will guide commercial banks to correspondingly lower deposit rates through a self-regulatory mechanism for interest rates. Second, the interest rates of all structural monetary policy tools will be reduced by 0.25 percentage points. Structural monetary policy tools generally refer to the loans provided by the central bank to commercial banks, which is expected to save banks about 15-20 billion yuan in funding costs annually, pushing banks to strengthen support for economic structural transformation. Third, the interest rate for individual housing provident fund loans will be reduced by 0.25 percentage points. Among them, the interest rate for the first house with a term of five years or more will decrease from 2.85% to 2.6%, and the interest rates for other terms will be adjusted synchronously. This is expected to save residents more than 20 billion yuan in provident fund loan interest payments annually, which is beneficial for supporting the rigid housing demand of families and promoting the stabilization of the real estate market.

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

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

Reporter from the 21st Century Economic Report:

May I ask, 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 these companies in their responses?

Wu Qing:

Thank you very much for your question! In response to the impact of the U.S. imposing tariffs, many A-share listed companies have disclosed information recently through announcements and performance briefings. Overall, the excessive imposition of tariffs by the USA severely disrupts the global economic and trade order, and the production and operation of listed companies will inevitably be directly or indirectly affected, some more so than others, especially companies with a higher proportion of exports to the USA. A-share listed companies, as a representative group of excellent enterprises in China's economy, possess strong resilience and adaptability. First, the enormous scale of domestic demand and potential demand is the strongest backing. Nearly 90% of A-share listed companies' revenue still comes from the domestic market. The stable and improving fundamentals of the Chinese economy ensure that listed companies' operational performance will continue to show stable growth. In 2024, three-quarters of listed companies are expected to be profitable, and half of them are projected to see profit growth, particularly as AI leads the wave of technological industries, with net profit growth of 13.2% and 12.9% respectively in the semiconductor and consumer electronics sectors. At the same time, dividend payouts and share buybacks across the All Market have also reached historical highs, with the dividend yield of the Csi 300 Index reaching 3.6%. In the first quarter of this year, according to the quarterly reports, the net profit of listed companies increased by 3.6% year-on-year, with net profit growth of 4.3% for those in the real economy sector. Second, the effectiveness of constructing a diversified export market is remarkable. Since the USA imposed tariffs on China in 2018, A-share listed companies have gradually adjusted and improved their overseas production capacity, with those able to do so making adjustments and further expanding into 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%, almost double. At the same time, the proportion of direct export revenue to the USA has significantly decreased, with 91% of companies having a share of less than 10% of their revenue coming from exports to the USA. Third, export competitiveness continues to improve. "Made in China" is now deeply embedded in the global industry chain and supply chain, and A-share listed companies have strong competitive advantages in product quality stability, economic scale production, and technological innovation. Since April 7, in less than a month, nearly 350 listed companies have disclosed share buyback plans, reflecting their confidence in their own value and future development.

Listed companies are an important part of China's economy and the cornerstone of the capital market. Moving forward, the China Securities Regulatory Commission will continue to promote the function of the capital market, while strengthening regulation, it should also strive to convey the warmth of regulation, doing its best to help affected enterprises deal with the impact of U.S. imposed tariffs. First, further increase the visits and support. From last year to the end of March this year, the China Securities Regulatory Commission and local governments visited a total of 2,352 listed companies and helped solve more than 3,300 pain points and difficult issues for enterprises. We will continue to work with relevant parties to ensure this work is effective. Second, optimize regulatory arrangements. For listed companies seriously affected by tariff policies, enhance regulatory tolerance regarding equity pledges, refinancing, and the use of raised funds, helping to alleviate difficulties. Further improve the rules for information disclosure exemptions and guide listed companies to strengthen effective communication with investors. Third, support transformation and upgrading, especially support listed companies in achieving transformation and upgrading through mergers and acquisitions. Since the release of the "Six Merger Rules" last year, nearly 1,400 restructuring projects have been disclosed in the Shanghai and Shenzhen stock markets, a year-on-year growth of 40%, among which major asset restructurings exceed 160, a year-on-year growth of 2.4 times. We are currently revising the "Management Measures for Major Asset Restructuring of Listed Companies" and related regulatory guidelines, further perfecting the supporting measures for the "Six Merger Rules" to more vigorously support mergers and acquisitions by listed companies, focusing on enhancing vitality and quality while continuously improving innovative capabilities and risk resistance. Fourth, strengthen support for multi-level capital market products and services. Support listed companies in utilizing stocks, bonds, REITs, and other tools to conduct direct financing, and also encourage eligible domestic enterprises to legally and according to regulations go public overseas, enhancing their capabilities to expand into global markets. Thank you!

Economic Daily reporter:

The real estate market and stock market are important indicators of the economy running. Director Li mentioned earlier. What considerations does the Financial Regulatory Bureau have for stabilizing the real estate and stock markets? Thank you.

Li Yunze:

Thank you for your question. Stabilizing the real estate and stock markets is of great significance to boosting social expectations and facilitating domestic demand circulation. On April 25, the Central Political Bureau meeting once again made clear requirements for stabilizing the real estate and stock markets. The Financial Regulatory Bureau firmly implements the decisions and requirements of the Party Central Committee and the State Council, working collaboratively to fight effectively with a 'combined fist,' and actively carry out relevant work.

Regarding stabilizing the real estate market, we are solidly promoting the expansion and efficiency of the urban real estate financing coordination mechanism, supporting the fight to ensure housing delivery. Currently, the approved 'white list' loans by commercial banks have increased to 6.7 trillion yuan, supporting the construction and delivery of over 16 million residential units, strongly safeguarding the legitimate rights and interests of many homebuyers and providing important support for stabilizing the decline in the real estate market. The positive changes in the real estate market are also reflected in 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 seeing the largest quarterly increase since 2022 and housing rental loans growing by 28% year-on-year. Recently, some leading international investment institutions coming to China also believe that the investment value of the Chinese real estate market is gradually becoming apparent. Next, we will accelerate the improvement of a series of financing systems 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 stabilizing real estate financing, effectively meet rigid and improved housing demands, strengthen funding supply for high-quality housing, and contribute to continuously consolidating the stabilization 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, a pilot reform of long-term investment by insurance funds was launched, providing substantial incremental funds to the stock market. Last month, we raised the upper limit for the proportion of equity assets investment by insurance funds, further releasing investment space. Next, we will introduce several specific measures to continue supporting the stability and activation of the capital market. First, we will further expand the pilot scope of long-term investment by insurance funds. Recently, we plan to approve another 60 billion yuan to inject more incremental funds into the market. Second, we will adjust the regulatory rules for solvency to further reduce the risk indicators for stock investments by 10%, encouraging insurance companies to increase their market participation. Third, we will promote the improvement of a long-term assessment mechanism to incentivize institutions and facilitate the realization of 'long money for long investments.'

Thank you.

First Financial reporter:

Just now, President Pan mentioned the creation and intensification of structural monetary policy tools, which will have a positive effect on economic structural adjustment. Could you please elaborate on this? Thank you.

Pan Gongsheng:

Traditionally, monetary policy primarily uses quantitative tools. However, everyone is well aware that many contradictions and challenges in China's economic operations are structural. If the structure is not adjusted well, then total regulation is unlikely to work effectively. Structural monetary policy tools help to push forward the resolution of some structural contradictions and problems. Over the years, the People's Bank of China has constantly explored in practice, under the principle of "focusing on key points, being reasonable and moderate, and having both progress and retreat," creating multiple structural monetary policy tools. Currently, a monetary policy regulation framework has formed, consisting mainly of quantitative tools supplemented by structural tools. As of the end of April, there are 9 existing structural policy tools, mainly focusing on key areas of the national economy, major strategies, and weak links, with a 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, commonly referred to as relending, are loans provided by the central bank to financial institutions. These tools generally include incentive mechanisms to guide commercial banks to autonomously extend loans to market entities. In recent years, under the guidance of structural monetary policy tools, the credit issuance structure of financial institutions has undergone significant changes. It is clear to everyone that a few years ago, commercial banks had substantial risk exposures in areas such as Real Estate and local financing platforms, but in recent years this type of risk exposure has gradually narrowed. The intensity, adaptability, and precision of financial support for the real economy have significantly improved.

This time we have created and intensified a series of structural monetary policy tools, which includes not only an increase in quantity but also price advantages, making better use of the traction and driving effect of structural monetary policy tools.

First, the interest rates of the structural monetary policy tools will be lowered by 0.25 percentage points. The interest rates of the relending for agricultural support and small businesses, technological innovation and technical transformation relending, carbon reduction support tools, stock buyback increase relending, and affordable housing relending will be reduced from the current 1.75% to 1.5%. At the same time, the rate of the pledged supplementary loans (PSL) for policy financial institutions will be lowered from the current 2.25% to 2%.

Second, 500 billion yuan of relending will be established for service consumption and retirement. Currently, China's economic policy focuses on expanding domestic demand and vigorously boosting consumption, with service consumption being a crucial area for the expansion of Consumption Upgrade. To enhance and improve the supply of service consumption, the People's Bank of China has established the "Service Consumption and Retirement Relending" tool, which incentivizes and guides financial institutions to increase financial support for key service consumption areas such as Lodging, Dining, Entertainment, Education, and the retirement industry, and to coordinate with fiscal and other industry policies to better meet the public's demand for consumption upgrade. This tool is also an innovative measure by the People's Bank of China to support consumption, with a quota of 500 billion yuan.

Third, the relending quota for technological innovation and technical transformation will be 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 the technological transformation and equipment upgrading of small and medium-sized technology enterprises and key areas. This time, we will increase the relending quota by 300 billion yuan, bringing it to 800 billion yuan, to support the expansion of the "Two New" policies.

The fourth is to increase the refinancing quota for agricultural and small enterprises by 300 billion yuan. After this increase, the total refinancing quota of the People's Bank for financial institutions will reach 3 trillion yuan. Coupled with the recent rate reduction for refinancing, a collaborative effect of quantity and price will be formed, which will further support commercial banks in expanding their loan disbursements to agricultural-related and small enterprises, especially small and medium-sized private enterprises.

In the future, based on the economic and financial operating conditions and the effectiveness of various tools used, there may be an expansion of tool scales, improvement of tool policy elements, or the creation of new policy tools. Thank you.

Hong Kong Southern Metropolis Daily Reporter:

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

Li Yunze:

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 continually improve service adaptability, encouraging the development of differentiated and personalized products to better meet the financial needs of enterprises of different scales and types. In particular, regarding the financing difficulties faced by small and micro enterprises and private enterprises, we have taken the lead in establishing a special financing coordination working mechanism to promote low-cost funds to quickly reach enterprises. Currently, more than 67 million business entities have been visited nationwide, and loans totaling 12.6 trillion yuan have been disbursed, of which about one-third are credit loans.

Recently, the General Administration will soon cooperate with relevant departments to further introduce a package of policies to support financing for small and micro enterprises and private enterprises, focusing on four areas of effort:

First, increase supply, continue to deepen and solidify the financing coordination working mechanism, carry out in-depth "thousands of enterprises and tens of thousands of households visit activities," increase the disbursement of first-time loans, renewals, and credit loans, and drive the growth rate of inclusive small and micro enterprise loans to exceed the average growth rate of all loans.

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

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

Fourthly, optimize the environment by strengthening the coordination of monetary, fiscal, industrial, regulatory, and other related policies, accelerating the improvement of relevant systems in terms of guarantees and credit enhancement, credit repair, and classification standards, to create a more suitable development environment.

In the current context of increasing external shocks, measures will be developed and implemented to safeguard the development of foreign trade in the banking and insurance industries, continuously increasing support from a financial perspective according to market-oriented and legal principles.

Firstly, strengthen financial relief. Expand the financing coordination work mechanism to all foreign trade enterprises, encouraging banks to accelerate the implementation of policies to stabilize foreign trade, ensuring that loans are fully disbursed and renewed. For market entities significantly affected by tariffs and experiencing temporary operational difficulties, provide precise services through "one enterprise, one policy."

Secondly, increase efforts to stabilize exports. Optimize supervision policies for export credit insurance, enhance underwriting capacity, provide preferential rates, implement fast claims and advance payments, 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 growth of new foreign trade formats.

Thirdly, assist in expanding domestic sales. Strengthen the financing guarantee for foreign trade enterprises transitioning to domestic sales, guide the establishment of a "domestic trade insurance mutual guarantee system," launch exclusive products, and promote the expansion and enhancement of domestic trade insurance. Implement multiple measures to support the boost of consumption and expand domestic demand, creating space for foreign trade enterprises to open up sales channels and accelerate the integration of domestic and foreign trade.

Thank you!

Reporter from the International Market News Agency of the USA:

Question to Chairman Wu Qing. In the current complex and volatile international situation, concerns are rising in the market about the potential spread of trade tensions to finance and other areas. Will this affect China's capital market's openness? What measures is the China Securities Regulatory Commission considering taking in response? Thank you.

Wu Qing:

Thank you for your question! Opening up 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 important deployment of the Party Central Committee on "improving the system and mechanism for high-level opening up" and "promoting high-level financial openness," actively and steadily advancing comprehensive 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 investors system, steadily expanding cross-border connectivity, fully removing foreign ownership restrictions on industry institutions, improving the efficiency of overseas listing registration, and more. Currently, foreign securities financial institutions and foreign capital have become important participants in the A-share market, with foreign capital holding a stable A-share market capitalization of around 3 trillion yuan through QFII, HK->SZ and other forms.

Despite the current complex and volatile external situation, the strategic direction of China's high-quality economic development is very clear and steadfast, and the stability and predictability of macro policies have further increased, especially with timely adjustments to macro policies, which have further enhanced foreign confidence in participating in China's capital market. Recently, we have also seen many foreign institutions upgrading the ratings of Chinese stocks, conducting intensive research on A-share listed companies, widely paying attention to and positively evaluating the Chinese capital market and Chinese assets. In the next stage, the China Securities Regulatory Commission will unswervingly promote high-level opening up of the capital market, further enhance the openness pattern, and steadily introduce a series of practical measures for opening up. Firstly, continue to expand institutional openness. Further optimize the access services for qualified foreign investors, efficiently complete the qualification approval and account opening as a "single transaction," and further expand the investment scope. Support eligible foreign institutions in applying for the qualification for securities fund investment consulting business. Encourage overseas investment institutions to establish RMB funds for domestic investment in accordance with regulations. Secondly, further enrich product supply. Promote the opening of futures and options to qualified foreign investors, support domestic and foreign futures exchanges in expanding cooperation on commodity futures settlement price authorization. Deepen the opening up of the exchange bond market and include REITs in the HK->SZ trading targets. Thirdly, continue to deepen market openness. Sort and optimize the overseas listing registration mechanism, process, and related elements to improve the quality and efficiency of overseas listing registration. Strongly support the construction of the Shanghai International Financial Center and consolidate and enhance the status of Hong Kong as an international financial center, steadily promoting the inclusion of RMB stock trading counters in HK->SZ and supporting the launch of cross-border investment and risk management products in Hong Kong, among various measures for cooperation with Hong Kong. Fourthly, 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 stock companies returning to the mainland and Hong Kong stock markets while ensuring the protection of investors' legal rights and interests. Thank you!

Reporter from the Financial Times:

I noticed that the Financial Regulatory Administration has previously introduced multiple pilot measures to support technology innovation, and in April jointly issued the "Implementation Plan for High-Quality Development of Technology Finance in the Banking and Insurance Sectors" with several ministries. What is the current progress of these policies? What further supportive measures will be taken? Thank you.

Li Yunze:

Thank you for your question. The development of Technology Finance is an essential path for promoting the deep integration of technological innovation and industrial innovation. We continuously encourage banks and insurance institutions to increase their support for technological innovation and actively explore new pathways for Technology Finance. As of now, the loan growth rate for high-tech enterprises is nearly three times the average growth rate of various loans, with Technology Insurance providing coverage exceeding 2 trillion yuan. The multiple pilot policies we have launched have all made positive progress. The equity investment pilot for financial asset investment companies has been ramped up and expanded, with the signed intention amount exceeding 380 billion yuan. The loans for mergers and acquisitions of technology enterprises have been carried out in an orderly manner, with the "first deals" by pilot banks in 18 cities already being implemented. The comprehensive pilot for the financial ecology of intellectual property is progressing steadily, with many areas having established service platforms to accelerate the resolution of challenges such as pledge registration and evaluation disposal. The service model for Technology Insurance is continuously optimized, with the compensation mechanisms for the first set of cases and first batches 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 a common practice internationally, a mechanism for multiple insurance companies to share risks for an emerging industry or sector, which is very important for the development of startup industries and sectors that are more uncertain.

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

Firstly, optimize credit services. Promote the establishment of a special mechanism for credit support for technological innovation, support banks in orderly setting up specialized Technology Finance institutions, and encourage the exploration of performance evaluation systems for long-term technology loans. Recently, we are revising the management measures for acquisition loans, which will be implemented as soon as possible to further unleash the potential of acquisition loans and promote the acceleration of industrial transformation and upgrading.

Secondly, 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 a mutual insurance body manner, promote insurance products for emerging fields such as robotics and low-altitude aircraft, and effectively safeguard the innovative development of enterprises.

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

Daily Economic News Reporter:

President Pan just mentioned that last year in the fourth quarter, the central bank introduced two monetary policy tools to support the Capital Markets. Many are concerned about what the central bank has done in the past six months. How would the effectiveness of the use of these tools be evaluated? How will the design of the tools be improved in the next phase? Thank you.

Pan Gongsheng:

Last year, the People's Bank of China, together with the China Securities Regulatory Commission, the Financial Regulatory Administration, and other departments, established two tools to support the capital markets. 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 welcome in the market, 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 based on market principles and provide important support for listed companies to manage their market cap through stock buybacks and shareholdings. The swap facility enhances the funding capacity of participants, while the buyback and shareholding relending provide low-cost funds for commercial banks issuing relevant loans, with market participants having the autonomy to decide when and how much stock to buy. Currently, the swap facility has conducted two operations totaling 105 billion yuan; more than 500 listed companies and major shareholders have announced the use of loan buybacks and shareholding of stocks, with the total loan amount being about 300 billion yuan.

These two tools are embedded with counter-cyclical adjustment properties and mainly play a stabilizing 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 these two tools to purchase stocks, thereby blocking the negative cycle of market weakening. For instance, in November of last year, around New Year's Day this year, and in early April when the USA's excessive tariffs brought shocks, the utilization of the swap facility significantly increased, and the buyback and shareholding activity of listed companies was also relatively active. The inherent stabilization mechanism established thereby has corrected the capital market's overshoot and stabilized market expectations.

In the process of implementing the policy, the People's Bank of China, together with the China Securities Regulatory Commission and the Financial Regulatory Administration, continuously summarizes practical experiences. A common topic I discuss with Chairman Wu Qing is also these two tools. We continuously optimize the policy elements of the tools based on suggestions from all parties to improve the implementation efficiency of the policies.

First, the total quota of 800 billion yuan for the two tools will be used in a combined manner. Once the quotas are merged, both tools can be utilized, which helps enhance the convenience and flexibility of the tools to better meet the needs of different types of market participants.

Second, regarding the swap facility, 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, including collateral such as Hong Kong stocks and restricted stocks, and has guided financial infrastructure to reduce business fee standards.

Third, concerning the buyback and shareholding 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 stock buybacks and shareholdings has been reduced from 30% to 10%. Meanwhile, we have negotiated with the State-owned Assets Supervision and Administration Commission to include China Chengtong Holdings and China Guoxin Holdings, two state-owned capital operation platforms, into the support range. Both companies have already announced plans to use a total of 180 billion yuan in tool funds to increase their shareholdings in listed companies.

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

Xinhua News Agency Xinhua Finance reporter:

Question to Chairman Wu Qing. You just mentioned the "Action Plan to Promote the High-Quality Development of Public Funds." What progress has been made in the work? What impact will the implementation of the action plan have on the capital market? Thank you.

Wu Qing:

Thank you for your question. At the two press conferences in January and March this year, when discussing the progress of encouraging medium- and long-term funds to enter the market, I also briefly introduced the basic ideas of public fund reform. Since the meeting of the Political Bureau of the Central Committee on September 26 last year, the China Securities Regulatory Commission has implemented the decision to "steadily promote the reform of public funds," conducting more than 30 special research sessions, listening to opinions from various parties including investors, institutions, etc., focusing on the pain points and bottlenecks commonly reflected by a broad range of investors, and formulating the "Action Plan to Promote the High-Quality Development of Public Funds," which is now mature and will be officially implemented today. The basic ideas have already been presented to everyone, and detailed information can be found on the website. Coincidentally, this reform initiative is happening at the same time as the recent discussions in the investment community about Buffett's farewell speech. Buffett is a highly respected investor who will retire this year. I believe the most important lesson from him is value investment, long-term investment, rational investment, and striving to return to investors; these fundamental concepts will not "retire." This is exactly what our reform aims to promote. This era calls for new great investors, and we have a number of very excellent enterprises and entrepreneurs. I believe that a group of outstanding investors and institutions will also emerge. Some important rules are needed to give rise to this. The focus of this reform mainly highlights a few 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 its essence of "being entrusted to manage the assets of others." Optimize the fee structure for actively managed equity funds, requiring lower management fees for poorly performing funds, and through a floating management fee mechanism, reversing the phenomenon of fund companies having guaranteed profits regardless of performance. At the same time, indicators directly related to the actual interests of investors, such as whether performance surpasses the benchmark and the investors' profit and loss situation, will be included in the assessment system for fund companies and fund managers, urging fund companies to shift from "prioritizing scale" to "prioritizing returns." Additionally, increase the requirement for fund company executives and fund managers to invest a portion of their bonuses into their own products and moderately extend the lock-up period, aligning the interests of these "key few" more closely with those of the investors.

Second, it emphasizes enhancing the stability of fund investment behavior. In response to issues like fund "style drift" and "mismatched products," it requires a clear performance benchmark for each fund product as a 'ruler' to measure the real performance of the product, avoiding deviations in investment behavior from the name and positioning of the product, and ensuring that investors receive what they see. At the same time, around forging the long board of long-term investment, it will establish a comprehensive incentive and restraint mechanism involving regulatory departments, self-regulatory organizations, evaluation agencies, and companies themselves, supervising fund companies to implement long-cycle assessments fully, and specifying that the weight of assessments for three years or more is not less than 80%, reducing the phenomenon of fund managers "chasing highs and cutting lows," and improving the long-term returns of products.

Third, it emphasizes improving the ability to serve investors. It guides fund companies and fund sales institutions to optimize the allocation of resources for investment research, product design, risk management, and 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. Meanwhile, it will accelerate the launch of a direct sales service platform for institutional investors to facilitate the participation of various institutional investors in fund investments.

Fourth, it emphasizes the work orientation of developing and expanding equity funds. Equity investment is key to public funds creating unique value for investors. Since September last year, the scale of equity funds has increased from 7 trillion yuan to 8.3 trillion yuan. In the next steps, we will strengthen regulatory guidance and optimize the classification evaluation mechanism of fund companies and fund sales institutions to promote an increase in the 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 long-term returns for investors. Based on the previously established quick registration mechanism for stock ETFs within 5 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 further highlight the orientation towards the best interests of investors, and investors' sense of gain will be further enhanced. Thank you!

Shou Xiaoli:

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

PHOENIX TV Reporter:

Governor Pan, during this year's Two Sessions press conference, you mentioned the innovative launch of the bond market "Technology Board." What is the progress of the related work? You just mentioned establishing risk-sharing tools for technology innovation bonds. What considerations do you have? Thank you.

Pan Gongsheng:

Building a financial system that aligns with technology innovation is an important focus for financial services in the high-quality development of the real economy, and it is also an important part of deepening the structural reforms on the financial supply side. In recent years, the People's Bank of China, together with relevant departments, has comprehensively leveraged the roles of credit, bonds, equity, insurance, and other tools to continuously increase financial support for technology innovation, achieving significant outcomes and accumulating valuable experience. Just now, Director Li Yunze and Chairman Wu Qing discussed a lot of situations in this regard.

Previously, the People's Bank of China, together with the China Securities Regulatory Commission, the Financial Regulatory Administration, the Ministry of Science and Technology, and other departments, actively prepared to launch the bond market "Technology Board," supporting three types of market players: financial institutions, technology enterprises, and private equity institutions to issue technology innovation bonds. At the same time, targeting the characteristics of technology enterprises and private equity institutions, we have improved the system arrangements for the issuance and trading of technology innovation bonds, information disclosure, credit rating, etc., and established a supporting rule system that aligns with the financing characteristics of technology innovation. The relevant policies and preparatory work have basically been completed. Currently, the market response is very positive, with various financial institutions, technology enterprises, and private equity 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 indicate that nearly 100 market institutions are planning to issue over 300 billion yuan in technology innovation bonds, and more institutions are expected to participate in the future.

In addition, to support Private Equity institutions in issuing long-term Bonds financing on the Technology Board, the People's Bank of China, in conjunction with the China Securities Regulatory Commission, has created a risk-sharing tool for Technology Innovation Bonds, drawing on the experience of establishing a financing support tool for private enterprises' Bonds in 2018. It is well known that Private Equity institutions play a critical role in supporting technological innovation, especially in promoting capital formation. Statistics indicate that Private Equity institutions have supported nearly 90% of listed companies on the Technology Board and 60% of companies on the GEM. However, Private Equity institutions have issued relatively few Bonds for financing in the Bond market, and issuing Bonds themselves may lead to shorter durations and higher costs.

The risk-sharing tool for Technology Innovation Bonds draws on the experience of the 2018 financing support tool for private enterprises' Bonds and is supported by low-cost relending funds from the People's Bank of China. These funds can be used to purchase Technology Innovation Bonds, while working with local governments and market-oriented credit enhancement institutions to adopt diversified credit enhancement measures to share the default loss risk of Bond investors, which can also effectively reduce the Bond financing costs for Private Equity institutions, allowing them to issue longer-term Bonds, such as 8-year or 10-year Bonds.

In the preliminary stages, during the policy formation process, several experts in Private Equity and well-known market private equity investment institutions were invited to provide their opinions. They offered many excellent policy suggestions and expressed high expectations for the introduction of this policy tool.

In summary, through the specific policy arrangements of the Bond market's Technology Board and risk-sharing tools, it is beneficial to further broaden the financing channels for technology-based enterprises and Private Equity institutions, stimulate market vitality and confidence, attract more social capital into the technological innovation field, and promote a mutually reinforcing and positive 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 thank you to all the journalist friends for participating. This concludes today's press conference, goodbye everyone!