We believe that the financial support policies in response to the COVID-19 are phased policies. Therefore, regarding policy design, focus should be placed on ensuring incentive compatibility and fending off moral hazards. We should pay attention to the “aftereffects” of the policies, keep the aggregates at appropriate levels, and consider in advance the reasonable timing of exit for the policy tools.
Fourth, we achieved effective money and credit growth while keeping the PBC’s balance sheet basically stable. The PBC has lowered the RRR ten times since 2018, releasing about RMB8 trillion of liquidity and bringing the average RRR down from 15 percent to the current nine percent.