BUSINESS Spillover of credit risks to financial sector posed by Evergrande containable: central bank governor

BUSINESS

Spillover of credit risks to financial sector posed by Evergrande containable: central bank governor

People's Daily app

22:42, October 20, 2021


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The spillover risks to the financial sector by the problems at Evergrande Group, one of China's leading property developers, can be contained, People’s Bank of China (PBOC) Governor Yi Gang said Sunday at an online meeting of the Group of 30 International Banking Seminar.

The main risks were Evergrande’s failure to repay matured debts, work suspension and uncertainty over the timely delivery of pre-sold properties, Yi said.

Evergrande was “an isolated case,” he said. “To alleviate the risks, authorities will try to prevent problems at Evergrande from spreading to other real estate companies and the financial sector so as to avoid a broader systematic risk.”

Meanwhile, Yi said that PBOC would focus on domestic and retail use of digital Chinese yuan, or e-CNY, as cross-border and international usage was relatively complicated, Yi said.

It is not the priority to promote the use of digital yuan in countries participating in the Belt and Road initiative at this point, he noted.

One the one hand, fintech development was driving down costs and improving the efficiency of universal financial services, but fintech also brought problems including monopolies and user data collection, Yi noted. China would try to prevent monopolies and safeguard fair market competition, he said.

Rising prices of raw materials like energy and metals were driving the surge in the producer price index (PPI), Yi believed. The PPI would likely remain high in coming months, but upward pressure should ease by the end of the year.

(Compiled by Lyu Kaiying)


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